In an emergency session of the US Bankruptcy Court for the Southern District of Texas on Thursday, Audacy received its requested stay on imminent debt maturities. With the same day’s news out of the Senate Commerce Committee, they’ll need every minute of it.
Attorney Caroline Reckler, representing Audacy, asked for a forbearance agreement under the company’s Debtor-in-Possession facility. The motion was made in response to months of delays around the FCC approval necessary for Audacy to emerge from Chapter 11 bankruptcy.
The broadcaster faces imminent maturities on August 19, which if unmet due to the ongoing FCC review, could lead to defaults under its financial agreements. To prevent this, Reckler negotiated with lenders to extend the maturity deadline to September 30, providing additional time to secure the necessary FCC approval.
Reckler outlined the debtor’s financial achievements and the significant progress made since the confirmation of their restructuring plan six months prior. The court was also briefed by Heath Gray from FDI Consulting, Audacy’s financial advisor, who confirmed the company’s sufficient liquidity to fulfill its obligations upon emergence from bankruptcy.
The hearing concluded with Judge Christopher López accepting the proffered information and authorizing the emergency motion.
Meanwhile, the FCC approval process isn’t going to get easier for Audacy, as Senator Ted Cruz (R-TX) released a statement in his capacity as the US Senate Commerce Committee’s Ranking Member. In an unprecedented move, the Commissioners of the FCC will have to review and vote on whether billionaire George Soros’ Soros Fund Management can become the majority shareholder in the company. Usually, the FCC’s Media Bureau would review and okay such deals, but Soros’ liberal ties have been highly questioned by Republicans throughout the process.
Sen. Cruz stated, “I am very pleased that Chairwoman Rosenworcel has come to her senses and abandoned her plan to have unaccountable bureaucrats rubber-stamp George Soros’s takeover of Audacy. Considering the significance of the matter at stake—a request for a waiver of statutory foreign ownership limits to transfer Audacy’s hundreds of broadcast licenses to new owners in the run-up to the Presidential election.”
“I have repeatedly said that a full Commission vote is both a basic duty of the FCC commissioners and necessary to protect the interests of the American public. I am grateful to Commissioners Carr and Simington for working with me to bring greater transparency and accountability to the federal bureaucracy.”
The FCC has not commented on how the usual process will be changed. If the recent trend of party-line votes by the Commission continues, then the likely outcome is 3-2 in favor of Audacy. It’s only the question of when that vote will come that is unclear.
