US Bankruptcy Judge Shelley Chapman rejected the objection by the IRS, represented by the US Attorney in Manhattan, and approved the sale to YMF Media, which made a credit bid of $180 million. No other bidder came forward to challenge YMF’s “stalking horse” bid, so the auction set for earlier this month was canceled.
The order from Judge Chapman simply swept aside the IRS challenge and another filed earlier by AFTRA, stating that all objections “are overruled on the merits and denied with prejudice.”
YMF Media was created by the two Yucaipa funds and two Fortress funds which own the senior debt of Inner City Radio Corporation. The “M” is believed to refer to Magic Johnson, who is already Yucaipa’s partner in three Phoenix radio stations.
Now that the bankruptcy court has given its approval, look for applications to be filed soon at the FCC to transfer 16 of the 17 stations to YMF, with one of five Columbia, SC FMs going into a divestiture trust, since the limit under the FCC’s new local ownership rules is four for that size market.
RBR-TVBR observation: While that $180 million price tag may seem cheap for such primo assets, including the two big FMs in New York and San Francisco, Yucaipa and Fortress didn’t even really pay that much. It’s believed they bought the $250 million or so of distressed senior debt for $66 million. Also, they swept nearly $15 million from Inner City bank accounts before filing to force the broadcaster into bankruptcy court.