Settlement Talks End, So Hearing On iHeart Suit Vs. Creditors Proceeds
April 4, 2016 at 5:10 PM (PT)
BLOOMBERG is reporting that IHEARTCOMMUNICATIONS INC. has told a TEXAS court that it has terminated settlement talks with a group of creditors over its lawsuit challenging the creditors' right to file a notice of default on the company.
iHEARTCOMMUNICATIONS, parent of iHEARTMEDIA and CLEAR CHANNEL OUTDOOR, had been discussing a settlement with D. E. SHAW, CANYON CAPITAL, FRANKLIN ADVISERS, and FRANKLIN MUTUAL, among others, but told the TEXAS District Court in BEXAR COUNTY that the talks had ended. The case moved on to a hearing on the case, in which iHEART is trying to block the creditors from declaring its move of over $500 million of CLEAR CHANNEL OUTDOOR stock to a subsidiary company as a default (violating debt covenants), potentially triggering accelerated debt repayments of up to $12 billion within 60 days of the notices. An attorney for one of the creditors told the court that the subsidiary is a "dormant, empty shell company ... it's a cookie jar, not an investment."