iHeartCommunications Alleges Creditor Bought Credit Default Swaps While Trying To Force It Into Bankruptcy
March 30, 2016 at 5:51 AM (PT)
The NEW YORK POST is reporting that papers filed by iHEARTCOMMUNICATIONS in a TEXAS state court allege that PAUL SINGER's ELLIOTT MANAGEMENT hedge fund bought credit default swaps on the radio company's debt while it also filed a notice of default designed to push iHEART into Chapter 11.
iHEART's claims, made as the company awaits word on whether it will get a permanent injunction against the MARCH 7th notice of default, allege that SINGER took out the insurance with an eye towards making windfall profits in the event that iHEART filed for bankruptcy.
Credit default swaps ensure that a creditor is paid in full if bankruptcy is declared. ALL ACCESS reached out to iHEART, which had no additional comment on this.