Judge Approves Citadel-Disney Settlement
May 11, 2011 at 4:00 AM (PT)
Bankruptcy Court Judge BURTON LIFLAND has approved the settlement of the WALT DISNEY CO.'s claims against CITADEL BROADCASTING, a move that should clear the way for CITADEL's sale to CUMULUS. LIFLAND signed off on the deal at a hearing in MANHATTAN on TUESDAY (5/11).
The settlement involves giving DISNEY an allowed unsecured claim of $14,231,358.78, covering $11,198,022 for a working capital adjustment, $414,536.78 in damages for rejection of a lease in CHICAGO, and $2.5 million for breach of the companies' Separation Agreement.
In addition, intellectual property licenses allowing CITADEL (and, subsequent to the sale, CUMULUS) to use DISNEY-owned properties like the call letters for the former ABC stations will be assumed (DISNEY retains ownership of the trademarks and grants a license for CITADEL to use the marks; DISNEY continues to own ABC NEWS RADIO and the ABC television network) and CITADEL is wiring $2 million in cash to DISNEY and giving DISNEY $1.5 million in advertising credit. The previous tax-sharing and indemnification agreement, separation agreement, and merger agreement, all part of the original sale of the ABC stations to CITADEL, are being rejected.