Veteran media broker and investor Robert Maccini has been tapped as Chief Restructuring Officer (CRO) for Inner City Media Corporation as it works its way through Chapter 11 reorganization. In fact, Maccini was hired, with the consent of the senior creditors, effective last Wednesday (10/12).
As CRO Maccini will have authority to take some actions without seeking approval from the Inner City board of directors, such as: reducing sales, marketing and other operating expenses, including terminating employees and arrangements with employees (other than Pepe Sutton, Keisha Sutton-James, Hal Jackson and Lois Wright); replacing any terminated officer or employee; selling any assets in transactions having a value of less than a half million dollars each; retaining a broker to market assets; file applications with the FCC; and negotiate and execute amendments to property leases. In addition, Maccini and his company, Media Consulting Services (MCS), will be involved in Chapter 11 negotiations with creditors and equityholders and be involved in monitoring and analyzing the operational and financial restructuring plans and progress.
MCS is to be paid a non-refundable professional fee of $16,935 for services provided in October and $25,000 for November and each month thereafter. MCS will also be reimbursed for its expenses related to the Chapter 11 reorganization of Inner City.
The agreement with MCS and Maccini may only be terminated by Inner City with the prior written consent of the senior lenders – Yucaipa, Fortress and Drawbridge. They began the bankruptcy process in August by filing involuntary Chapter 11 petitions against Inner City and its subsidiaries. The cases were converted to voluntary Chapter 11 reorganization in September.
Maccini has committed to be physically present in Inner City’s New York headquarters an average of two days per week to perform his duties and to “remain generally available remotely.” Maccini told the court that his only relationship to any of the parties involved was that he used to be CEO of Ando Media, which provided online audience measurement and ad insertion services to some Inner City stations. Ando typically received less than $500 per month under that agreement and he resigned as CEO of Ando on July 31, 2010.
RBR-TVBR observation: One thing that is certain about bankruptcy is that it is expensive. There are lots of legal fees to be paid and, of course, Maccini will now have to be paid for his work to straighten out the financial tug-of-war between the Inner City owners and the company’s senior creditors. That should be challenging, so Bob has his work cut out for him. The plus is that he knows the radio business inside-out and, as noted in the company’s filing with US Bankruptcy Judge Shelley Chapman, that experience “enables him to advise the Debtors in a cost-effective, efficient and timely manner.”
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