LBI Media has become the fourth multi-market radio operator to file for Chapter 11 bankruptcy this year.
The Spanish language radio and television operator filed for bankruptcy this morning after failing to make a debt payment due on November 15. The privately owned company owns sixteen radio stations in the Dallas, Houston, Los Angeles, and Riverside/San Bernardino markets as well as the Estrella TV network and eleven of its affiliates. The company also syndicates Spanish language programming in both mediums.
LBI Media’s blames its financial issues its debt load and corresponding interest expense obligations as well as the 2008 recession and the “diversion of advertising spend by companies to digital media”. The company states it has outstanding funded debt obligations in the aggregate amount of approximately $530 million.
The filing comes as the company’s first lien lender, HPS Investment Partners LLC is involved in litigation with an ad hoc group of its second lien noteholders. The filing petition says that LBI has entered into a restructuring support agreement with HPS, who seeks approval of up to $38 million in debtor-in-possession financing to be provided by HPS.
LBI Media claims that 36% of the company’s 2017 revenue and 56% of earnings in 2017 came from its radio division. Among the largest unsecured creditors are TMI Trust Company with $27,954,755, US Bank NA at $8,464,963, ASCAP at $1,977,292, and two Nielsen subsidiaries owed. Nielsen Media Research is owed $1,063,095 and Nielsen Audio $532,798.
