As required by its agreement with senior creditors, Inner City Media Corporation (ICMC) and its subsidiaries filed their response Thursday (9/8) to the involuntary Chapter 11 petitions the senior creditors had filed. ICMC has formally agreed to go into Chapter 11 reorganization, with US Bankruptcy Judge Shelley Chapman set to rule Friday (9/9) on a slew of so-called “first day” motions which will allow Inner City to continue operating its radio stations normally.
OK, the filing was one day later than stated in last week’s hearing, but the documents are voluminous. And the senior creditors – Ron Burkle’s Yucaipa Companies, Fortress Credit Lending and Drawbridge Special Opportunities Fund (which is also a Fortress fund) – aren’t likely to complain, since the filing was completed a day ahead of the hearing that Judge Chapman had already set for Friday.
Apart from the quarter billion dollars claimed by the senior creditors, who acquired the company’s senior debt for a reported $66 million, Inner City doesn’t appear to be delinquent on any bills. The only item listed as “disputed” in the list of its 30 largest unsecured creditors is $416,667 claimed by the defunct Air America Radio. Inner City’s WLIB-AM New York was once the flagship outlet for the liberal talk network. Air America shut down and filed bankruptcy in January 2010. That was long after its time-leasing deal with WLIB had ended in August 2006.
Inner City’s biggest unsecured creditor claim is from its former legal firm, Skadden Arps, for $791,571. It lists $466,972 being owed to the insurance company Guardian.
Next are a couple of routine claims for its radio business: $213,750 owed to Premiere Radio Networks and $189,009 to its rep, Eastman Radio. Both are subsidiaries of Clear Channel Communications.
Around $70K each are owed to SoundExchange and Arbitron, which would be expected to appear on the list of creditors compiled by any radio station owner. Also listed with smaller claims are BMI, ASCAP, AFTRA’s pension fund, AndoMedia, Hipcricket, Research Director and Marketron. As you would expect, there are various utility companies, a payroll processor and business service providers.
RBR-TVBR observation: Don’t look for anything to change at Inner City’s radio stations while the Chapter 11 process goes forward. They’ve been generating plenty of cash flow to keep all of their payroll and other operating expenses covered. The dispute is solely over the senior debt.