Bressler, Pittman Reject More Interest Payments, Get Big Bonuses


With the clock ticking and a widely expected Chapter 11 restructuring agreement likely arriving within 48 hours, iHeartMedia CFO and President/COO Rich Bressler and Chairman/CEO Bob Pittman are likely meeting with EVP/Chief Communications Officer Wendy Goldberg on just how — if at all — the company will share its financial decisions and choices.

When it comes to skipping interest payments, the dissemination vehicle is the U.S. Securities and Exchange Commission.

In an 8-K filing made with the SEC on Thursday (3/1), iHeart revealed that its Board of Directors elected to forego interest payments due March 1 of approximately $59.1 million with respect to its outstanding 11.25% Priority Guarantee Notes due 2021, and of approximately $78.8 million with respect to its outstanding 9.0% Priority Guarantee Notes due 2021.

That’s a sign that a bankruptcy protection decision may be mere hours away.

On July 10, 2017, the company exchanged $15.6 million principal amount of its 10.0% Senior Notes due 2018 for $15.6 million principal amount of newly issued 11.25% Priority Guarantee Notes due 2021. These were issued as “additional notes” under the indenture governing the 11.25% Priority Guarantee Notes due 2021, and gives the company more time to repay its debts, albeit at a higher interest rate.

However, skipping interest payments on a debt swap could lead to questions about its ability to repay the new debt.

The 9.0% note interest payment decline is the latest in a series of moves tied to five priority guarantee notes iHeart has failed to receive consent solicitations for from its noe holders.

The proposal would have seen the Aggregate Fixed Consideration Amount shift to a higher Aggregate Contingent Consideration Amount for its 9.0% Priority Guarantee Notes due 2021 — moving from $1,750,000 to $2,625,000.

Why did iHeart’s board decline to make the payments? The company cited “active discussions” that continue among its lenders, noteholders, and financial sponsors regarding a comprehensive debt restructuring.

That’s the same reason iHeart’s board gave on February 1, when a $106 million interest payment on its outstanding Senior Notes due 2021.

Under the indentures governing the notes, iHeart has a 30-day grace period to make the interest payments before such default triggers an event of default. Thus, today’s decision means iHeart has until April 1 before it goes into default.

But, what about the $106 million interest payment? An event of default will be triggered on Friday should iHeart not pay up by the close of business March 1.


The SEC filing regarding the skipped interest payments came 24 hours after an SEC filing in which iHeart outlined the bonus compensation for Mr. Bressler, Mr. Pittman and EVP/General Counsel and Secretary Robert H. Walls Jr. 

Under a new 2018 Key Incentive Bonus Plan, Pittman will be eligible to earn a Quarterly Bonus of $2,325,000.


Rich Bressler, COO/CFO, iHeartMedia

For Bressler, he’s eligible to earn a Quarterly Bonus for each calendar quarter of 2018 of $1,325,000.

The Compensation Committee approved payment of the Quarterly Bonus for the period ending March 31, 2018.

In addition, the Compensation Committee accelerated the payments of bonuses Pittman and Bressler previously earned during 2016 ($500,000) and 2017 ($500,000) under the iHeartMedia 2015 Supplemental Incentive Plan.

Lastly, Walls is eligible to earn a Quarterly Bonus for each calendar quarter of 2018 of $225,000.