Citadel Files For Bankruptcy

Time Runs Out For Citadel

CITADEL BROADCASTING, the nation's third biggest radio broadcaster has indeed filed for bankruptcy in NEW YORK on SUNDAY (12/20), by filing a voluntary petition with the bankruptcy court.

The bankruptcy filing, as ALL ACCESS first reported earlier this month (NET NEWS 12/10), is a pre-arranged deal with lenders to swap debt for equity and will reduce CITADEL's debt load to about $762.5 million.

The filing lists assets of $1.4 billion weighed down under $2.5 billion in debt. A huge, unserviceable debt and interest payment was due on JANUARY 15, 2010, which forced the Chapter 11 filing.

Our business will continue as usual and the company will work to emerge from the restructuring process as quickly as possible.

FORSTMANN LITTLE & CO. owns 29% of CITADEL's common stock. Secured creditors will get a share of the new loan and 90% of the new common stock in a reorganized CITADEL. Unsecured claim holders are eligible for 5% of their claim (up to $2 million) in cash, or 10% of the claim in the new CITADEL. Leading the list of unsecured debt holders are JPMORGAN CHASE BANK NA (listed as unspecified/unknown amounts), WILMINGTON TRUST CO. ($49.2 million), and THE WALT DISNEY CO. ($11.2 million).

CITADEL CEO FARID SULEMAN will remain in that position overseeing the 224 radio stations presently in the company. In a press release, he noted, "Our business will continue as usual and the company will work to emerge from the restructuring process as quickly as possible."

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