Below is our initial take on recent bankruptcy-related developments:
Radio station owner Cumulus Media files for bankruptcy to cut $600 mln debt | Reuters
The company claimed various challenges, including a lawsuit filed against Neilsen Audio over an updated 2024 policy that would require radio companies to buy data separately for all local markets in which they operate.
S&K Take: Cumulus filed a prepack on Wednesday in the SD Tex., its second bankruptcy (the first was in 2017), with about $46 million in cash on hand and an RSA with existing secured claim holders that would effectuate a debt-for-equity swap. The Debtors currently carry about $700 million in funded debt, and the RSA would deleverage by approximately $529 million. Post-reorg equity value ranges from $89 to $149 million according to the Debtors’ investment banker. GUCs would ride through unimpaired. The Debtors anticipate the process would take about 4 to 6 months. The case got off to a good start yesterday, with an uncontested first day hearing in front of Judge Perez that saw cash collateral usage approved. The second day hearing is scheduled for March 25.
Nicklaus-Tied Family Office Wins Auction for Bankruptcy Assets | Bloomberg Law
Jack Nicklaus had previously filed a $50 million defamation lawsuit against Nicklaus Cos., the company bearing his namesake.
S&K Take: We have covered the Nicklaus case before. The case has had a fair number of twists and turns, and at bottom is a battle between the Golden Bear and Howard Milstein over control of the company. Looks like that has finally been resolved. The Debtors were in the midst of a sale process which had been extended twice, with Iconix Brands acting as the stalking horse with a $50 million bid. In what seems to be a surprising result, 20 Majors LLC was selected as the winning bidder with a $35.7 million bid. The reason that the bid was deemed to be highest and best was because 20 Majors’ bid was tied to a settlement which would include releases of claims between Nicklaus and Milstein. 20 Majors is managed by Rory Brown, who also manages a family office with Jack Nicklaus’s son, Gary. If you are doing the math, Nickalus won 18 majors and 2 US Amateurs. A seemingly elegant end to what had been a messy case, with the Golden Bear reclaiming his IP.
Opt-Out Releases Nixed For Buffalo Diocese's Ch. 11 Ballots | Law360
A New York bankruptcy judge ruled that opt-out boxes, which were in the design for The Roman Catholic Diocese of Buffalo’s Chapter 11 plan ballots, cannot be used to record creditor consent to third party releases.
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S&K Take: Another data point on what “consensual” means with respect to releases. The WDNY ruled that opt-out releases were insufficient, and that affirmative consent was required for creditors to release non-debtors, in this case, the Parishes. The Diocese cases are very sensitive for obvious reasons, however, so query whether the precedent has to be discounted to some extent.
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