Blame it on politics, and on the Federal Communications Commission.
Six months after the U.S. Bankruptcy Court for the Southern District of Texas approved Audacy Inc.‘s restructuring plan, the FCC’s OK has not yet come. As such, the company late Monday filed an urgent motion seeking the court’s approval to extend a forebearance period current set to expire on Monday.
In the motion filed late on August 12, Audacy seeks court approval to extend a forbearance period — a pause on meeting certain financial obligations — that is currently set to expire on August 19.
With the court’s OK at an emergency hearing scheduled for Thursday (8/15), a Debtor-in-Possession Forbearance Agreement would extend the forbearance period to September 30.
Given the Houston Bankruptcy Court’s actions in bankruptcy cases, including the swift four-week approval process seen for Audacy, the motion is likely to be approved without objection. Still, approval of the agreements is essential, as it will allow Audacy to continue operations without further undue fiscal stress as it works toward financial stability.
If for some reason the Forbearance Agreement was denied by the Houston bankruptcy court, then Audacy would be required to meet its financial obligations according to the original terms of the debtor-in-possession financing agreement. This could include making payments that were temporarily halted during the forbearance period, increasing the risk of defaulting on its DIP financing, Streamline Publishing’s Radio Ink first reported on Wednesday.
Much scrutiny has been placed on Audacy in 2024 regarding its financial health and ability to move ahead as a restructured company. But, it is FCC inaction that has led to the urgent motion and Thursday’s request in the Houston bankruptcy court. What’s the holdup? George Soros.
Known as a liberal activist, Republican leaders have placed intense scrutiny on the exit plan for Audacy, which sees Soros Fund Management’s acquisition of $400 million in Audacy debt. This would make Mr. Soros the largest shareholder of Audacy, and some believe this would result in undue influence.
In the emergency motion, Audacy states it remains optimistic about receiving necessary approvals from the FCC for its restructuring plans, which are compliant with the Communications Act.
— Additional reporting by Adam R Jacobson
