Two radio companies, Citadel Broadcasting and NextMedia Group, separately filed for Chapter 11 bankruptcy protection this week. Both filings were pre-arranged.
Citadel sought bankruptcy to implement a pre-negotiated plan under which it has the support of 60 percent of its secured lenders, the company said in statement.
A federal bankruptcy court in Manhattan said Citadel can use $36 million in cash to run its business on an interim basis, Bloomberg reported. Citadel listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Private-equity firm Forstmann Little & Co. owns 29 percent of Citadel common stock, according to court papers.
The court gave the broadcaster permission to pay $6.5 million owed to its on-air talent, as well as a routine request to pay employees $3.4 million in unpaid wages, Bloomberg reported.
Citadel is the third-largest radio group owner behind Clear Channel and CBS Radio. It has 224 radio stations and produces programming for more than 4,000 affiliates. It syndicates talk show hosts and disc jockeys such as Mike Huckabee, Joe Scarborough, Mark Levin, Michael Baisden and Don Imus.
NextMedia owns 36 stations in seven unrated suburban markets. NextMedia said in court papers filed in federal bankruptcy court in Wilmington, Del., that it owed senior lenders $162.3 million and another group of junior lenders $89.6 million.
Company CFO Eric Neumann stated in the filing that under a proposed reorganization plan, NextMedia would be taken over by its junior lenders. Should the proposal win court approval, the senior lenders would be paid in full, Reuters reported.
In a statement on its Web site, NextMedia said the reorganization process will have no impact on day-to-day operations and will not result in changes to senior management or any reduction to employee headcount.