Peak Broadcasting, which O&Os 11 stations inFresno and Boise received approval 2/24 from the U.S. Bankruptcy Court on its reorganization plan. The plan, approved by the majority of creditors, will address how the company will restructure its debt and satisfy creditor claims. It provides for continuing payment to Peak’s employees, vendors and other unsecured creditors.
The Chapter 11 filing revolves around Peak’s senior debt. Other creditors are being paid under the reorganization plan and the senior lenders, mainly Oaktree Capital and Rabobank, will become the new owners, pending FCC blessings of license transfers.
Nearly all of the equity at Peak is currently held by various Duff Ackerman & Goodrich (DAG) investment funds, with CEO Todd Lawley and other execs having only small personal stakes. Under the reorg plan, Peak’s assets will go to a new company, with the senior creditors as the 100% owners.
According to the Chapter 11 plan filed with the US Bankruptcy Court in Delaware, the 1st lien holders are owed $87.5 million. In addition to owning 100% of the new Peak they’ll also be issuing a new $37 million loan.
Said General Electric Capital Corp., which had a first-lien claim: “The evidence is clear that GE Capital’s decision to support the plan was based on, among other things, its preference for obtaining a consensual deal with the debtors with a high degree of certainty as to outcome when compared with the costs, time, and uncertainties presented by a nonconsensual litigated bankruptcy.”
There’s also a 2nd lien of $18 million held by Bernard National Loan Investors as successor to D.B. Zwirn Special Opportunities Fund. It will be paid $1,025,000 under the proposed Chapter 11 exit plan.
DAG won’t go away completely empty-handed. It is to be paid $3.3 million for a senior second lien.
Unsecured claims by creditors such as Arbitron ($38K), Premiere Radio Network ($18K), Katz Radio ($17K) and ASCAP ($16K) are unimpaired and are to be paid in full.
The confirmation paves the way for the emergence of Peak Broadcasting from Chapter 11 protection. The company anticipates emergence sometime in early March, just two months after the initial filing of its petitions.
“I want to thank everyone involved with our organization for the smooth transition through the debt restructuring,” stated Todd Lawley, Peak’s CEO. “We now have the right capital structure on which to grow our business and support the communities in which we operate. We thank our employees, customers and vendors whose support has never wavered.”