A federal bankruptcy judge has approved Cumulus Media’s prepackaged Chapter 11 reorganization plan, clearing the company to reduce its funded debt by approximately $592 million and move toward emergence as a private entity.
Alfredo R. Perez, presiding in the US Bankruptcy Court for the Southern District of Texas, confirmed the plan Wednesday, overruling an objection from the US Trustee Program regarding provisions that release certain legal claims against nonbankrupt third parties.
The Atlanta-based broadcaster entered Chapter 11 last month with creditor support already secured, allowing for a fast-track process that concluded in less than six weeks. The restructuring addresses roughly $660 million in debt, with most of the company’s secured obligations converted into equity.
Under the plan, holders of approximately $168.6 million in 2029 secured claims will receive 95% of the reorganized company’s new common stock and $50 million in exit convertible notes. Creditors holding about $494.5 million in other funded debt claims will receive the remaining 5% of equity, while existing shareholders will be wiped out.
The company’s emergence from bankruptcy remains contingent on approval from the FCC for the transfer of control of its broadcast licenses.
SoundExchange secured protections preserving its statutory audit rights for royalties covering 2017 through 2022, while the company will continue its agreement with the National Football League for audio rights carried by its Westwood One network.
CEO Mary Berner and the company’s CFO will remain in their roles under amended agreements. A new board, selected by key creditors, will take over upon the plan’s effective date, after regulatory approval is obtained.
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