iHeart, Creditors to Go to Trial, Stay Extended
The Texas judge saw things iHeart’s way in its litigation against some of its creditors.
The parties involved in the case being argued in the State District Court in Bexar County, Texas have mutually agreed to extend the existing temporary restraining order until a trial. That’s scheduled for May 16 in the same court.
iHeart said it’s pleased with the outcome and looks forward to an expedited trial.
“As we have previously stated, we believe our contribution of Clear Channel Outdoor Holdings, Inc. stock to our subsidiary Broader Media, LLC fully complied with our financing agreements. The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner, and we will continue to evaluate opportunities to strengthen our balance sheet,” a spokeswoman told us.
A hearing began Monday between iHeart and some of its lenders. the broadcaster won a temporary restraining order that rescinded the default notice; in exchange the company agreed not to transfer or sell additional stock.
At issue is was the transfer on Dec. 3 of 100,000,000 shares of Class B common stock of Clear Channel Outdoor Holdings, Inc., from Clear Channel Holdings, Inc., one of the company’s wholly-owned subsidiaries that is a “restricted subsidiary” under its various debt documents, to Broader Media, LLC, one of iHeart’s wholly-owned subsidiaries that is an “unrestricted subsidiary”. Benefit Street, D.E. Shaw, Franklin Advisers and Franklin Mutual, have alleged that this transfer violated certain covenants of the broadcaster’s priority guarantee note indentures.