On Wednesday, iHeartMedia and a group of its bondholders involved in litigation in the State District Court in Bexar County, Texas, agreed to extend the existing temporary restraining order until a May 16 trial. Here was iHeartMedia’s reaction to that ruling…
iHeartMedia said it was pleased with the outcome from the hearing and the company looks forward to an expedited trial. “As we have previously stated, we believe our contribution of Clear Channel Outdoor Holdings, Inc. stock to our subsidiary Broader Media, LLC fully complied with our financing agreements. The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner, and we will continue to evaluate opportunities to strengthen our balance sheet.”
The Wall Street Journal reports that the lenders are arguing that iHeart gave away the shares, which were part of the package securing their debt, with the transfer from Outdoor to Broader Media, and received nothing in return. They say that violates the terms of the debt agreement.
The hearing this week in San Antonio was the result of a lawsuit filed by iHeartMedia on March 7. A group of bondholders claimed the company violated covenants by transferring the 100,000 shares to Broader Media. That lead to the lawsuit filed by iHeartMedia, which was followed by a 14-day restraining order rescinding the notices of default, which lead to the hearing this week.
