We may soon know whether Nassau Broadcasting Partners will be in Chapter 11 bankruptcy reorganization or Chapter 7 liquidation as its senior lenders have requested. US Bankruptcy Judge Kevin Gross is set to hear arguments Wednesday (10/12) in his Delaware courtroom.
Goldman Sachs Lending Partners LLC, Fortress Credit Opportunities I LP and P.E. Capital LLC had filed with the court to force Nassau and its various subsidiaries into Chapter 7 bankruptcy, which would have a trustee liquidate the company. Nassau responded with a motion to convert the case to Chapter 11, which would hold creditors at bay as President Lou Mercatanti seeks to reorganize the balance sheet.
The response by the lenders to the motion to convert the case to Chapter 11 was due by the end of business Tuesday (10/11). Judge Gross will hear arguments Wednesday and is also prepared to act on so-called “first day” motions to keep the company operating in bankruptcy if he approves the conversion to Chapter 11.
RBR-TVBR observation: An attorney friend tells us that Chapter 7 would not necessarily have the extreme consequences that we had anticipated and as hinted at in a Nassau filing. A Chapter 7 trustee, we are told, would not have to pink-slip employees and shut down operations, but rather could keep the businesses running while seeking to find buyers for the assets as quickly as possible.