iHeartMedia Wins Debt Transfer Lawsuit
iHeartMedia has won its lawsuit over the transfer of debt that could’ve forced the company into default.
Texas state District Judge Cathleen Stryker ruled that the bondholders suing over December 2015 transfer of assets to Broader Media, Inc. in order to raise capital cannot file default notices against iHeart. The company had transferred 100 million shares of Clear Channel Outdoor Holdings to Broader Media for the purpose of issuing new debt to pay back its expiring debt in an attempt to pay off the $20.75 billion it owes.
The bondholders issued default notices in March prior to iHeart winning a temporary restraining order leading into the trial. iHeartMedia released the following statement following its courtroom victory:
Today, the State District Court in Bexar County, Texas ruled in our favor when it determined that our contribution of Clear Channel Outdoor Holdings, Inc. stock to our subsidiary Broader Media, LLC was a permitted investment under our financing agreements.
The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner. In full compliance with our financing agreements, we will continue to evaluate opportunities to strengthen our balance sheet.
We look forward to constructive discussions with our lenders as we continue to position iHeartMedia for long-term growth.