After hearing arguments from attorneys for Nassau Broadcasting Partners and its senior lenders, US Bankruptcy Judge Kevin Gross granted Nassau’s motion to convert the cases. Nassau and its subsidiaries will now proceed in Chapter 11 reorganization, not the Chapter 7 liquidation sought by its lenders.
The petitions from Goldman Sachs Lending Partners LLC, Fortress Credit Opportunities I LP and P.E. Capital LLC in September had come after years of wrangling between the lenders and Nassau President Lou Mercatanti. The lenders had demanded in August that Nassau file a voluntary Chapter 11 and put the company up for auction by the bankruptcy court, with the lenders making a “stalking horse” bid to set the target for other potential bidders.
Mercatanti refused and the lenders then filed the involuntary Chapter 7 petitions to try to force a sale of the radio stations.
But with the ruling by Judge Gross on Wednesday (10/12) Mercatanti will remain at the helm of Nassau as a debtor-in-possession. The company’s 49 radio stations will continue normal operations and its 365 employees will be paid as usual while Nassau and its restructuring advisors work on a deal to recapitalize the company.
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