A federal bankruptcy judge has confirmed Cumulus Media’s prepackaged reorganization plan, clearing the Atlanta-based radio group to restructure roughly $660 million in debt and emerge as a private company with Mary Berner remaining in the CEO role.
US Bankruptcy Judge Alfredo R. Pérez, sitting in the Southern District of Texas in Houston, signed the confirmation order on Wednesday, less than six weeks after Cumulus filed for Chapter 11 protection. The speed reflects the prepackaged nature of the filing: Cumulus had secured creditor support and solicited plan votes before entering bankruptcy, with ABL facility claim holders, 2029 secured claim holders, and other funded debt claim holders approving the plan.
The reorganization converts the bulk of the company’s secured debt into equity.
Holders of allowed 2029 secured claims, which the plan fixes at approximately $168.6 million, will receive 95% of the reorganized company’s new common stock along with $50 million in exit convertible notes. Holders of other funded debt claims, encompassing 2026 notes, 2026 term loans, and 2029 deficiency claims totaling roughly $494.5 million, will receive the remaining 5% of new equity. Previously existing shareholders will receive nothing.
The plan’s effectiveness remains conditioned on FCC approval of a transfer of control application for Cumulus’s broadcast licenses, which the company must now file.
SoundExchange secured specific carve-outs protecting its statutory royalty audit rights for calendar years 2017 through 2022, with all applicable limitation periods tolled for the duration of the bankruptcy. The NFL’s audio rights agreement with Westwood One is assumed under the plan without modification.
Both Berner and CFO Frank Lopez-Balboa retain their posts under amended employment agreements assumed as of today’s confirmation date. A new board, selected by the consenting 2029 holders, takes over on the effective date, which cannot occur until FCC consent issues. The reorganized company will operate as a private entity, with plan securities exempt from Securities Act registration requirements.
Berner commented, “When we initiated this prepackaged restructuring in March, we did so with a clear objective: to right-size our balance sheet to support long-term success. The court’s prompt approval of our plan keeps us firmly on track to eliminate approximately $600 million in debt and positions us to emerge with a significantly stronger financial foundation. We look forward to completing the restructuring and emerging as a well-capitalized company, better equipped to compete in the evolving audio landscape.”
