As Cumulus Media continues to await the thumbs up from the Federal Communications Commission on its Chapter 11 reorganization, a federal bankruptcy judge has extended its exclusive rights period.
Last Friday, Judge Alfredo R. Pérez of the U.S. Bankruptcy Court for the Southern District of Texas approved the motion to extend Cumulus’ filing deadline for a Chapter 11 plan until Oct. 30, and its deadline to solicit acceptances for a plan until Dec. 29.
The news of the approval was first reported by Inside Radio.
Cumulus initially requested the 120-day extension on July 2 out of an “abundance of caution,” stating in its filing that while its Chapter 11 proceedings “are steadily progressing towards conclusion,” its emergence out of Chapter 11 remains tied to the FCC’s regulatory approval process.
The media company explained in its filing that although it has diligently executed the required long-form license transfer applications, the timing for commission approval is outside its control.
Cumulus expects that it will exit bankruptcy shortly after FCC approval and other remaining conditions.
Under Chapter 11 rules, according to attorneys at Fraser Trebilcock, a debtor initially holds an exclusive 120-day period to file a plan without interference from outside creditors.
Courts can extend this exclusivity period up to a maximum cap of 18 months. Once exclusivity expires, third-party creditors are free to submit competing reorganization plans.
Cumulus is seeking to eliminate $600 million in debt with this process. It said this would eliminate substantially all of its remaining debt and significantly strengthen its financial position.
The company filed a “prepackaged” restructuring in April, and the bankruptcy court quickly signed off on it.
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