An appeals court in San Antonio Wednesday sided with iHeartMedia in ruling that a stock transfer was allowed under the terms of its loan agreements. The decision is a blow to creditors who attempted to declare a default on billions of dollars of the company’s debt, Dow Jones Newswires reports.
The group of creditors including Och-Ziff Capital Management Group LLC and Franklin Resources Inc. hold upward of $3 billion in debt. They contend that a 2015 equity transfer of shares in Clear Channel Outdoor Holdings to a separate unrestricted unit — Broader Media LLC — had triggered an event of default, in violation of the terms of iHeart’s priority guarantee notes.
The creditors assailed this action, claiming that iHeart “gave away” the shares—part of the collateral package securing their debt—by shifting them to Broader Media and receiving nothing in return, Dow Jones reports.
The Texas court said no.
“We’re pleased with the court’s decision,” an iHeart spokeswoman said to Dow Jones.
CC Outdoor Holdings is a publicly traded subsidiary of iHeart.
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