When a big broadcaster files for Chapter 11 bankruptcy protection, one group that feels the impact is equipment suppliers.
It’s unclear how many are owed money by Cumulus, one of the country’s biggest radio companies, but at least one supplier has filed a proof of claim in the Chapter 11 bankruptcy proceeding and hopes it will be paid at least something for goods it provided. According to a docket summary in a federal bankruptcy court, 305 Broadcast LLC seeks approximately $3,800 for an Elenos ETG500 FM transmitter it sold Cumulus for its Huntsville, Ala., cluster. The claim, filed last Friday, is signed by Anthony A. Gervasi Jr., 305’s sales manager.
Records filed to support the claim show the 500 W transmitter with remote interface web/SNMP remote control shipped in October. Gervasi told Radio World in an email that 305 Broadcast does not expect to file further claims against Cumulus; he declined further comment.
Separately, a group of unsecured creditors appears underwhelmed by a prearranged settlement Cumulus reached with its main lenders prior to filing Chapter 11. Right now the reorganization plan calls for about 83.5% of the new company, once it emerges from bankruptcy, to be held by lenders that hold over $1.7 billion of the company’s debt. The “Official Committee of Unsecured Creditors” thinks the official lenders settlement is too generous, according to court records.
Members of the unsecured creditors committee include Enticent LLC (dba as Triton Digital), U.S. Bank National Association, Angelo Gordon Super Fund, Ivy High Income Fund, EJS Investment Holdings, Caitlin Ferrari and the Screen Actors Guild-American Federation of Television and Radio Artists.
The filing this week by the committee objects to the “debtors motion” and details areas of concern, including a Cash Collateral Order that contains “numerous terms that inappropriately benefit the term loan lenders at the expense of unsecured creditors,” according to the committee tasked with protecting their rights. It continued, “The proposed restructuring, if implemented, would significantly overcompensate the term loan lenders to the detriment of unsecured creditors.”
An unsecured creditor is any entity that provides a company with services or products without obtaining collateral as a guarantee. A full list of unsecured creditors has not been released to the public. A list of unsecured creditors has not been publicly released.
Cumulus, which voluntarily filed for Chapter 11 in late November, has said the prearranged reorganization package will trim its debt by about $1 billion. According to the prearrangement plan, it could emerge from bankruptcy as soon as May 28, 2018.