After losing its battle to have a federal bankruptcy judge rework the Chapter 11 reorganization plan for Citadel Broadcasting, Aurelius Capital Partners has thrown in the towel and sold its shares. It says in an SEC filing submitted late Wednesday that it now owns no shares of Citadel.
Aurelius took a financial loss on its gamble that Citadel’s shares would be worth something. As previously reported, the investment funds managed by Aurelius paid over $1.2 million to acquire their 16.7 million shares of Citadel’s common stock – an average of just under 7.3 cents per share. The latest SEC filing did not provide a total for the recent stock sales, but indicated that the bulk of the shares were sold in a range of one to two cents each.
That’s still more than the theoretical value of the Citadel shares, which are to be worthless as soon as the company emerges from Chapter 11. The reorg plan is already approved and the emergence from bankruptcy court protection is expected any day now.
RBR-TVBR observation: Aurelius apparently had the financial wherewithal to take a gamble of over a million bucks and write the whole thing off when it lost the gamble. We wonder who was still out there buying millions of Citadel’s shares for even a penny, when their value is almost certain to become zero any day now.