As we reported yesterday, iHeart got into a bit of a battle with bondholders over its debt. Specifically, some of the lenders say iHeart violated covenants by transferring 100K shares of stock to a subsidiary called Broader Media. On Wednesday, the State District Court in Bexar County, Texas, issued iHeart a 14-day restraining order rescinding the notices of default issued by several iHeart lenders. The court has the option to extend the temporary order another 14 days. As a condition to obtaining the temporary restraining order, iHeart agreed not to dispose of any additional shares until a hearing is held.
iHeartMedia issued the following statement after the ruling. “As we previously stated, we believe the contribution constituted a permitted investment under, and fully complied with, our financing agreements. We are pleased with the outcome of today’s hearing and look forward to a favorable ruling on the merits of our case. The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner, and in full compliance with our debt covenants we continue to evaluate opportunities to strengthen our balance sheet.”
