Equity Media is due in a US Bankruptcy court today to battle a lender’s attempt to have its Chapter 11 reorganization converted to Chapter 7 liquidation. Meanwhile, the company has been going through more management changes. John Oxendine resigned as CEO, but remains a director, and the board fired the CFO. A Little Rock courtroom is the site of today’s battle over whether the company will continue to operate.
First, some good news for employees. US Bankruptcy Judge James Mixon has approved an order allowing the company to make payroll for wages owed at the time the Chapter 11 filing was made.
In an SEC filing reporting the bankruptcy filing, Equity Media also disclosed that its board of directors terminated Patrick Doran as CFO on December 8th. Two days later the directors named Robert Becker as Chief Operating Officer and principal executive officer. At the same time, John Oxendine resigned as CEO, but will remain a director.
Judge Mixon will hear arguments today on the motion by Silver Point Finance to liquidate Equity Media instead of trying to reorganize it and take control away from the current management. Silver Point wants the judge to either convert the Chapter 11 case to Chapter 7 (liquidation), appoint a trustee to run Equity Media under Chapter 11 instead of the current management or simply dismiss the case so Silver Point can pursue its efforts to have the state court appoint a receiver.
If Silver Point prevails, broker Larry Patrick is its nominee to serve as trustee and liquidate the stations. According to the lender’s filing with the court, Patrick had arranged several station sales as the company worked with Silver Point to try to get its financial house in order, but each time Equity Media’s board raised its price expectations and stymied deals.