The State District Court in Bexar County, Texas ruled in iHeart Media’s favor when it determined that the broadcaster’s contribution of Clear Channel Outdoor Holdings, Inc. stock to its subsidiary Broader Media, LLC was a permitted investment under iHeart’s financing agreements.
Judge Cathleen Stryker handed down the ruling Tuesday. The trial wrapped up last Friday. She included a permanent injunction rescinding the default notice, according to our check of the court docket.
At issue was whether the broadcaster was allowed to move more than 100,000,000 shares of Class B common stock of Clear Channel Outdoor Holdings, Inc., a “restricted subsidiary” to Broader Media, LLC, an “unrestricted subsidiary” under the company’s various debt documents. The action was meant to help sell a bond to help iHeart pay off some of its $20.6 billion debt.
The broadcaster believes the move was permitted and complied with financing agreements while some of its creditors do not and said some covenants were violated by the transfer.
“The strong performance of our operating business provides us with the flexibility to manage our capital structure in a prudent manner,” iHeart said in a statement after the ruling. “In full compliance with our financing agreements, we will continue to evaluate opportunities to strengthen our balance sheet.”
Asked whether mediation talks would continue with its lenders, a spokeswoman declined to comment to RBR+TVBR, however the company seemed to address that in this statement: “We look forward to constructive discussions with our lenders as we continue to position iHeartMedia for long-term growth.”