O’Neil Finds Lessons in Failures

Few people get a chance to run a company before age 25.

Peter O’Neil, who is 25 and campaigning hard for county supervisor against incumbent Mike Antonovich, had a chance to run two of them in the past five years. But both companies ran aground, leaving behind about $2 million in debts.

The most recent to go under was Nustar Broadcasting, a small satellite television network he started in Tujunga in 1986. In January, a U.S. Bankruptcy Court judge in Los Angeles ordered the company’s liquidation under Chapter 7 of the federal bankruptcy code, which provides for the sale of assets and payment of proceeds to creditors. But Nustar had no assets to sell to pay off any of the $1.98 million that creditors claim they are owed, said Richard R. Hopkins, a Los Angeles lawyer who has represented Nustar.

Before founding Nustar, O’Neil was president of Pacific Cable Network, a fledgling Burbank company that also failed and was liquidated in 1986 under Chapter 7, according to bankruptcy court records.

O’Neil, a Pasadena resident, who said he is now doing free-lance television production work, concedes that his business problems raise legitimate questions about whether he is competent to be a county supervisor.

“I am very young,” he said, “but I do have a business background, and I am a good, hard-working person. I’ve had business setbacks with undercapitalized companies, and that may be an issue with some voters.”

He argues that the two companies were based on sound ideas and could have been successful if they had been better financed. He adds that he once ran a successful plant store. He noted that Harry S. Truman once saw one of his businesses fail--a clothing store in Kansas City--and he later became president.

“For someone who is 25 years old, I don’t think this is a big minus,” he said.

With Nustar, O’Neil’s problems began the first day of broadcasting, which prophetically fell on a Friday the 13th. The network planned to offer viewers with satellite dishes such original programs as “Date Who We Tell You,” “Hollywood Asylum” and “Yuk Yuks Tonight.”

The budget was so tight and the audience so small in the first few weeks that one night a viewer in Wisconsin called Nustar’s night watchman, asked to see the 1955 Western “Rage at Dawn,” and got his wish.

Within two months, the Federal Communications Commission fined Nustar $6,000 for broadcasting without a license. O’Neil said a company that leased Nustar a truck with satellite equipment in it failed to obtain the FCC license.

Nustar’s parent company, Boston Investments, a company O’Neil headed that later became Nustar Media, also ran afoul of securities authorities in Utah, where the company was originally organized.

Patty Louie, director of registration with the Utah Securities Division, said neither Boston nor Nustar filed audited financial results required there of public companies that have previously sold stock. As a result, she said, state officials said in January the stock can no longer be traded in the state.

Hopkins, the lawyer, said he was unaware of the action. He conceded that the stock is now worthless anyway because Nustar Media has no ongoing operations and is no longer traded in the wake of Nustar Broadcasting’s failure.

But, he said, he is hopeful that the company can be bought, which could give creditors some stock in the new company.

He said Nustar Media still has some value because of its status as a public company. Often, he noted, private companies want to buy existing public companies with no operations so they can later raise money by offering stock to the public.

Among O’Neil’s ideas, the one that has probably received the most attention so far is his proposal to make the RTD free to bus riders.

Karen Wingard, president of the Democratic Club of Pasadena Foothills, which has endorsed O’Neil, said she knows of his past business problems and isn’t concerned.

“We are aware he has enjoyed both successes and failures in business,” she said. “In regards to it, one would have to say, ‘Remember Harry Truman?’ ”