This is a corrected version of our earlier story. As a normal, expected part of the bankruptcy process, iHeart submitted a proposed confirmation order — but the judge has not approved it yet.
In a 97-page document filed Monday, iHeart has submitted a proposed Confirmation order that the company is hoping will bring the matter to an end.
iHeart’s reorganization process began in March of 2018 and will wipe about $10 Billion off the books for the largest company in the radio industry. Isgur has written, “The plan satisfies the “best interest of creditors” test of the bankruptcy code.”
iHeart says the plan will allow the company and their stakeholders to emerge from chapter 11 with a clean slate, separate the from Clear Channel Outdoor, and position the company for continued growth and long-term success as a world-class industry leader. They call it an “extraordinary outcome for all of their stakeholders.”
Things really started to ramp up toward a conclusion for iHeart in late 2018. In December iHeart announced it had gotten “every class of creditor” to approve its Chapter 11 plan. Later in the month, in order to help get the plan approved, iHeart announced plans to separate Clear Channel Outdoor from the company. Along the way it was reported that both Apple and Liberty Media might be interested in at least a stake in the company. When the final paperwork is filed and the bankruptcy case is close, Bob Pittman will remain Chairman of the Board and CEO.
Some notes of interest from the lengthy bankruptcy document:
– SoundExchange, owed nearly $600,000, must be paid within 30 days or at an agreed upon time by both parties.
– iHeart must take care of all its obligations with SAG-AFTRA, including any arbitral awards entered in any grievance filed.
– iHeart agrees to waive all rights to reject any contractual agreements with the Denver Broncos and will assume all contractual agreements with the team to cure any outstanding defaults.
– iHeart must pay all fees owed to BMI and SONY Music Entertainment.
In a separate filing with the bankruptcy court, PGN Group, iHeart’s Term Loan Group, which represents more than $7.4 billion in senior loan agreement claims, the largest creditor group, showed its support for the plan. “As will be established at the various phases of the confirmation hearing, the plan maximizes value and is in the best interests of the bankruptcy estates and all stakeholders, thanks in large part to the contributions of the Term Loan/PGN Group. The Term Loan/PGN Group thus respectfully requests that the court overrule the WSFS and trustee objections and enter an order confirming the plan so that it may become effective as soon as possible.”
WSFS is the indenture trustee for iHeart’s legacy notes. WSFS represents $475 million of outstanding legacy notes – less than three percent of iHeart’s outstanding debt. WSFS has raised a number of confirmation objections. The trustees assert that the court should not confirm the plan because it fails to preserve their indemnification rights against iHeart. The trustees claim that they are exposed to post-effective date liability because a number of PGN holders opted out of the plan’s global release. The Term Loan Group calls the trustee objection “dubious.”
iHeart tells the court it has come up with a plan that provides the best alternative available to the debtors and their stakeholders to restructure their obligations. “No party has asserted otherwise, and every class entitled to vote at every debtor entity has voted overwhelmingly in favor of confirmation.”
Here are the dates in the process that should lead to the end of the bankruptcy case for iHeart:
– This Thursday at 9:00 a.m. to consider all confirmation issues other than those scheduled to be heard on January 17, 2019, and January 22, 2019;
– January 17, 2019, at 9:00 a.m. to consider all issues concerning the CCOH separation settlement, other than those issues scheduled to be heard on January 22, 2019, and any issues continued from the January 10, 2019, hearing;
– January 22, 2019, at 8:30 a.m. to consider all remaining issues concerning consideration of the class action settlement related to the CCOH Separation Settlement and the GAMCO Motion; and
– January 23, 2019, at 2:30 p.m. to consider all remaining confirmation issues.
We apologize to iHeart for the earlier headline that the plan was already approved by the judge.
Getting rid of the outdoor component was the best move but the real test is still ahead….can they make any money?
I see no evidence of iHeart diminishing their extravagant spending. Their disrespect for employees is of a degree that the Corporation should get no better treatment. I personally have heard their stories. iHeart has no heart when competing against smaller stations. They are ruthless. It is my hope that the judge will use iHeart’s concept of fairness when he makes his judgement.
Your statements are anecdotal, and not based on fact. IHeart obviously does not set the rates or business practices of competing stations. There are thousands of long time, happy employees at the iHeart properties. And Bob Pittman and Rich Bressler keep the company personnel well informed, have cut 10 billion dollars in debt owed to creditors pending BK plan approval, and are solidly supported by iHeart’s Board of Directors.
From here:
That iHeart would hold itself up as a prudent and respectable organization is one thing of the gag-inducing kind. The more important and revealing element is that anybody would echo and promote sentiments of support while maintaining that the organization is behaving in ethical manners.
But, when the leader of such a star spangled, awesome nation is held up as a poster-boy for reason, critical thinking and fundamental fairness, would it come as any surprise that corporations would be behaving similarly? And getting away with it?
But then, there is always the appreciation that cable news might collapse without all them fine Big Pharmy dollars. Now, there’s a magnificently spectacular dodge that is boring holes in citizens’ pockets.
So, I’m not surprised either – just righteously indignant.
iHeart is no more than another sophisticated scam with no known intentions of improving services to audiences and advertisers.
Whatever happened to ‘personal accountability’ to pay back your debts? These guys are masters of promising to “never, ever, ever screw anyone like we did before” and then heading to court to cry wahwahwah! Meanwhile, EVERY reputable owner in the markets competing with iHeart stations plays by the rules, pay their bills and employ real people to run their stations. THIS is what’s wrong with America today! Our system rewards inferiority while penalizing all those who bust their astericks to do the right thing and play by the rules!
Kind of an unfair shot, Rick S. Yes, iHeart is bankrupt but Bob Pittman and Bressler and team just helped iHeart to get out of 10 billion dollars in debt. That gives iHeart obviously some significant relief, and now gives the company a chance to grow and flourish. There are a lot of stations and jobs on the line, and no doubt management is working to protect as many of those stations and jobs as possible.
“iHeart’s reorganization process began in March of 2018 and iHeart’s reorganization process began in March of 2018 and will wipe about $10 Billion off the books for the largest company in the radio industry”…..The continued norm of doing business in radio! Business as usual in the red until the cash flow is dried up, declare bankruptcy, then a judge declares someone else will eat the debt AND the company moves on to establish more lines of credit. Imagine if everyone in America did that with their personal finances? Jeez!
Rick S I agree iHeart continues there picture perfect image while canning hard working people and screwing others by paying them pennies on the dollar then comes out smelling like a Rose. I would bet the money they don’t have to pay people they rightly owe it to that these morons will do it all over again in no time!