Two Objections Filed Against Cumulus In Bankruptcy Court

Two Objections Filed

Late last month (NET NEWS 11/29), ALL ACCESS reported CUMULUS MEDIA had reached a pre-packaged bankruptcy deal with holders of 69% of its term loan, allowing it to reduce its debt by more than $1 billion. The company filed voluntary petitions for reorganization under Chapter 11 in U.S. Bankruptcy Court for the Southern District of NEW YORK.

Now, with the first court date scheduled for this THURSDAY, DECEMBER 21st, come two objections that were filed YESTERDAY (12/17)

One is from RANDY MICHAELS’ MERLIN MEDIA, which claims CUMULUS agreed to purchase WLUP and WIQI/CHICAGO for a reported $50 million in cash. MICHAELS told ALL ACCESS, "The actual price is higher. It was an LMA to purchase with a put call feature. CUMULUS has been making LMA payments which are credited to the purchase price. MERLIN exercised the put. As required by contract, CUMULUS and MARLIN filed with the FCC to transfer the stations. Five days after FCC approval CUMULUS is obligated to pay MERLIN the 51 million outstanding on the purchase and close on the stations. Since the matter is pending now, FCC approval could occur anytime."  

The second objection comes from CUMULUS’ unsecured creditors, which has filed that the proposed Cash Collateral Order in the case, “contains numerous terms that inappropriately benefit the Term Loan Lenders at the expense of unsecured creditors and the Committee tasked with protecting their rights.”

CUMULUS had no comment.

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