Here is an update on Cumulus and their Chapter 11 Status.
U.S. Trustee William Harrington has filed an objection with the U.S. Bankruptcy Court for the Southern District of New York over Cumulus Media’s plan to award millions of dollars in bonuses while the company is in Chapter 11 and restructuring. The objection won’t impact a previous plan to pay out bonuses that was approved by the court on February 8, to hundreds of employees. Harrington claims Cumulus failed to show that the proposed bonus payments comply with current bankruptcy code.
Harrington says the plans cover 574 fulltime employees and that Cumulus has failed to satisfy their evidentiary burden to demonstrate the Incentive Plans are Incentive Plans. The bankruptcy code’s policy is to “preserve the value of the estate for the benefit of its creditors and to prevent the unjust enrichment of the insiders of the estate at the expense of its creditors.”
In a statement, Cumulus said, “The objection filed last night has absolutely no impact on the authorizations the Court gave the company on February 8th to pay incentive compensation for employees who earned it in 2017, or will earn it in 2018. We will be making our incentive compensation payments to those employees, beginning with this week’s normal payroll cycle