Two Objections Filed In Cumulus Bankruptcy Case

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With the first court date scheduled for Thursday in the Cumulus Chapter 11 bankruptcy court case, two objections were filed yesterday. One objection is from Randy Michaels’ Merlin Media. Merlin states that Cumulus agreed to purchase WLUP-FM and WIQI-FM for roughly $50 million in cash, and then, after that agreement was reached, Cumulus sought to negotiate the purchase price to a lower cash amount. Merlin is asking the court for more time to gather evidence in the case.

The second objection comes from Cumulus’ unsecured creditors. That group is objecting to the proposed Cash Collateral Order in the case, claiming it “contains numerous terms that inappropriately benefit the Term Loan Lenders at the expense of unsecured creditors and the Committee tasked with protecting their rights.”

“The terms of the proposed Cash Collateral Order are improper and prejudicial, and mirror the Proposed Restructuring in improperly inflating the Term Loan Lenders’ security and rights with little regard for the interests of unsecured creditors.”

If this bankruptcy plan is approved by the court, Cumulus’ debt will be reduced by about $1 billion. In exchange, Term Loan Lenders will receive 83.5% equity in the company. Unsecured creditors will received 16.5% equity.

 

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