Kevin O’Brien still hasn’t given up on winning back control of ABC 6.

O’Brien’s attorney, Americo Scungio, has informed the Rhode Island Supreme Court his client will appeal the March 22 sale of WLNE-TV in a court auction, judiciary spokesman Craig Berke told WPRI.com.

Scungio did not respond to a phone message left on Monday.

Citadel Communications of Bronxville, N.Y., took over management of WLNE on Sunday after buying the station on auction in a deal valued at $5.8 million, including $4 million in cash. The FCC still must approve the transfer of WLNE’s license to Citadel.

At the time, Associate Justice Michael Silverstein denied an objection by O’Brien, who argued its court-appointed receiver Matthew McGowan was not seeking nearly enough money in exchange for the station. He said WLNE earned a profit in 2010, and argued that its positive cash flow should allow the receiver to continue operating the station while seeking more for it.

O’Brien paid $14 million in 2007 to buy ABC 6 from Freedom Communications. He asked Silverstein to place the station in receivership last summer, saying in a court filing WLNE was “insolvent and unable to meet its obligations as they come due.”

The notice of appeal is the only information about the appeal on file right now, Berke said. A transcript of the Superior Court proceedings has been ordered, and that must be completed before the high court’s clerk can add the case to its docket, he said.

(photo: Ted Nesi/WPRI)

A judge gave the green light Monday for a court-appointed receiver to auction off ABC 6, but he didn’t set a formal date for when the sale will actually take place.

Superior Court Associate Justice Michael Silverstein agreed to the sale procedure outlined by WLNE-TV’s receiver, attorney Matthew McGowan, according to court documents obtained by WPRI.com.

There are “as many as six interested parties” who may make a bid for the low-rated local channel, which filed for the state-law equivalent of bankruptcy last July, McGowan said in a court filing.

Silverstein also agreed to extend WLNE’s affiliate agreement with ABC, which expired on Dec. 31, through the end of next month; a deal is likely to be done by then. The network has asked all the groups bidding on ABC 6 to submit their proposals by this Friday.

The receiver confirmed that he has all but settled on a “stalking-horse offer” for the station. That would be a potential buyer whose proposal will be the benchmark for the others and who will win the station if nobody tops its offer.

Competing bids will be due two business days before the auction date. McGowan said the bidding process will be open rather than sealed. If the stalking-horse’s bid is highest, it will take over the station; if it isn’t, the stalking-horse will get $150,000 for its troubles.

The only potential buyer whose identity is known is former Providence Mayor Joseph Paolino Jr., who has told multiple news outlets he is part of an investor group looking to scoop up ABC 6.

Once a buyer is picked, it will likely take two to five months for the FCC to formally transfer ABC 6′s license, McGowan said.

Silverstein also turned aside a last-ditch effort by the station’s current owner, Kevin O’Brien, to block the sale.

According to court documents, McGowan at first attempted to sell ABC 6 without outside help before bringing in a New York brokerage, Cobb Corp, to assist him. O’Brien argued the failure to bring in a specialty firm earlier “caused a diminution in the value” of the station.

For more on the financial picture at ABC 6, check out my WPRI.com In-Depth story from last August.

CobbCorp LLC, a media brokerage firm in New York City, says it’s been “exclusively retained” to sell ABC 6 and its half-ownership of Newschannel 5, a cable channel carried by Cox Communications that airs some WLNE content. My full story is over on WPRI.com.

A sale is definitely looking like the probably outcome of ABC 6′s sojourn in receivership. “It looks like that’s the option that makes the most sense,” receiver Matthew McGowan told the Projo in August. He would know, since he’s the man in charge (other than the judge, of course). Although WLNE has long trailed both us and WJAR in the ratings, in this time of rapid media change who knows what will happen next?

Update: In other ABC 6 news, B.J. Finnell, who has been its news director since 2008, left the station Thursday to take a job with the PR firm Regan Communications, WRNI’s Ian Donnis reports. Although I didn’t know B.J. well, my interactions with him were all positive. ABC 6 GM Steve Doerr told Ian a temporary replacement is handling the news director job for now.

I have a new story up on the main site about the potential of a new owner stepping in to buy ABC 6 out of receivership:

WLNE-TV ABC 6 may have trouble finding a buyer if its owner decides to sell after a 30 percent drop in revenue pushed the station into receivership last week.

“There are a lot of stations on the market and not a lot of buyers right now,” said Blair Levin, a fellow at the nonprofit Aspen Institute who was a senior official at the Federal Communications Commission until May. WLNE may be more attractive if its balance sheet is cleaned up during receivership, he said. …

WLNE’s revenue from advertising and other sources was $5.9 million in 2009, down from $8.2 million in 2008, according to BIA Financial Network Inc., a Virginia research firm. A decade ago, in 2000, WLNE’s revenue totaled $15.1 million.

Read the whole thing, as they say. And if you’re interested in some of the history of how the station ended up here, check out this piece Ian Donnis wrote in 2005 for The Providence Phoenix.

Between Central Falls and WLNE-TV ABC 6, not to mention a number of lesser-known entities, the bankruptcy-like section of Rhode Island state law known as receivership has been getting quite a workout lately.

Not being a lawyer, I have been curious why insolvent organizations were turning to receivership rather than the federal bankruptcy courts. (Though in Central Falls’ case, doing so was not possible until the governor signed the new law on municipal finances last month.)

During an interview for a story that will come out next week, I put that question to Allan Shine, the Providence attorney who is representing WLNE’s current ownership in its case. The bottom line? Receivership is simpler. Here’s what he said:

With a Chapter 11 [aka, a business bankruptcy filing] – which you and your colleagues talk about in the news with companies such as GM or Enron or United Airlines – you’re dealing with huge, huge legal and accounting fees – millions and millions and millions of dollars a month in big Chapter 11s. It’s the nature of the beast with a huge company that has assets in every state and sometimes around the world, and everyone has lawyers and they can be tremendously expensive.

In Rhode Island, we don’t have United Airlines at least, and so we don’t have huge, mega-Chapter 11s. And over the years, members of the bar and the bankers and the people who are interested in creating value and helping out distressed companies, they have actually made use of the receivership process as a means for smaller and middle-sized companies to reorganize or to be sold as a going business, without the expense and the formalities of the federal court proceedings.

As an example, Shine pointed to Bess Eaton, the Westerly-based coffee chain that filed for bankruptcy in 2004 and was bought by Tim Hortons. Bess Eaton had to file in federal bankruptcy court because it had locations in a number of different states, and receivership only covers cases where everything is in Rhode Island, he said. (Shine represented Bess Eaton in its filing.)