Cumulus Media’s creditors have voted to approve the radio broadcasting company’s prepackaged Chapter 11 reorganization plan, clearing the path toward a bankruptcy exit that would eliminate $592 million in obligations.
A Houston federal bankruptcy court is expected to confirm the plan on Wednesday (4/15) at a combined hearing that also includes a look at the “Adequacy” of a necessary disclosure statement. The hearing was initially scheduled for Tuesday.
Filed Monday in the U.S. Bankruptcy Court for the Southern District of Texas, Cumulus’s confirmation brief shows holders of 100% of ABL Facility Claims and 2029 Secured Claims that voted backed the plan, along with holders of 98.93% in principal amount of Other Funded Debt Claims.
The company led by CEO Mary Berner and CFO Frank López-Balboa on March 4 filed for Chapter 11 protection after executing a restructuring support agreement with an ad hoc creditor group that, at signing, held roughly 72% of 2029 debt claims, a figure the filing says has since grown to approximately 82.7%.
The plan would convert approximately $592 million of the company’s $697 million in prepetition funded debt into equity, issue $50 million in exit convertible notes, and provide access to a $100 million revolving credit facility on emergence. Annual cash interest expense would fall by roughly $49 million. General unsecured creditors would be paid in the ordinary course, leaving the reorganized company with approximately $105 million in remaining debt obligations.
While settling other dissent, one unresolved objection stands between Cumulus and confirmation.
The U.S. Trustee argued that creditors who simply failed to opt out of the plan’s third-party release provisions cannot be considered to have consented to them, a position rooted in the Supreme Court’s 2024 Purdue Pharma ruling. Cumulus countered that Purdue addressed only involuntary releases and left consensual ones intact, and pointed to a string of recent cases in the same courthouse where identical objections were rejected.
Applicable objections to be considered include a limited objection from SoundExchange; consensual resolutions were seen in an objection withdrawn by the Tennessee Department of Revenue
If confirmed in the Wednesday hearing by Judge Alfredo R Perez, Cumulus has asked the court to waive the standard 14-day stay of the confirmation order, allowing it to close immediately. FCC transfer of control approval remains a separate requirement and runs on its own timeline.
Berner, who has led the company since 2015 and directed it through its first bankruptcy restructuring some eight years ago, and López-Balboa will remain under amended employment agreements, though the filing is careful to note the incoming board retains full authority to replace them.
— Additional reporting by Adam R Jacobson
