There are typically several major Chapter 11 bankruptcy cases filed each year. The case of IHeartMedia made headlines in 2018. This is part four of a summary of the more interesting recent cases of 2018:
IHeartMedia, Inc.
San Antonio-based broadcasting mogul, IHeartMedia Inc. (“IHeartMedia”), the nation’s largest radio station owner, filed 2018’s largest bankruptcy case (based on assets and liabilities) with more than $20 billion of debt. IHeart filed a Chapter 11 case after repeated efforts to solve balance sheet problems and to extend debt maturities proved futile and ineffective.
The company filed its bankruptcy case with a restructuring agreement in place that took several months to approve. This was facilitated by splitting from Clear Channel Outdoor Holdings Inc. and exiting bankruptcy with $5.75 billion in new debt secured by virtually all of its assets.
IHeartMedia has amended its Chapter 11 plan repeatedly with the most recent version amended to form a cash pool for a group of unsecured creditors. At the end of 2018, IHeartMedia announced that the plan was approved by more than 90 percent of voting creditors and shareholders.
This occurred after the debtor’s unsecured creditors had objected to a previous plan and attempted to sue iHeartMedia’s secured lenders, based on the claim that the debtor was leaving claims potentially worth billions of dollars on the table to appease these lenders and gain approval for its plan of restructuring.
iHeartMedia is the second (Cumulus Media Inc. was the first) national broadcast radio mogul to file a Chapter 11 bankruptcy in the last year. It anticipates exiting bankruptcy in early 2019 after the confirmation hearing this month for its’ most recent plan.
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