The network had denied rumors just a month ago that it would file for bankruptcy protection. On Friday, Air America spokeswoman Jaime Horn told The Associated Press that the filing became necessary only recently after negotiations with a creditor from the privately held company's early days broke down.
The network will stay on the air while it resolves issues with its creditors, Horn said. In addition to Franken, the network also features shows from liberal talk show host Randi Rhodes and syndicates shows from Jerry Springer and Portland, Ore.-based talk show host Thom Hartmann.
Horn declined to name the creditor with which talks had reached a logjam. The company will operate in the interim with funding from its current investor group.
Air America also said Friday it had named Scott Elberg as its new CEO. Elberg, a former general manager of the radio station WLIB in New York, has been with the network since May of last year.
The filing and executive shuffle marked the latest turbulence at the liberal talk radio network, which went on the air two years ago. This April, Danny Goldberg stepped down as CEO and was replaced by an interim chief executive from a management consulting firm.
"Nobody likes filing for bankruptcy," Elberg said in a statement. "However, this move will enable us to concentrate on informing and entertaining our audience during the coming months."
Air America has struggled financially since its inception. According to documents filed with the U.S. Bankruptcy Court for the Southern District of New York, the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million so far in 2006.
Air America also disclosed in the court documents that two directors departed in the last two months, Douglas Kreeger and Tom Embrescia. Gary Krantz also departed as president in June, and executive vice president Tom Athans and chief operating officer Carl Ginsburg both left in July.