RBR-TVBR had previously reported that the list of 30 largest unsecured creditors filed by Inner City Media Corporation (ICMC) included the usual suspects you’d find in a radio company’s normal bills, such as Arbitron, Premiere Radio Networks, Eastman Radio and SoundExchange. It seems they’re not only unsecured, but also unconcerned about the bankruptcy proceeding.
According to a filing by Tracy Hope Davis, the United States Trustee for the Southern District of New York, she didn’t find enough interest among the unsecured creditors to form the usual Creditors’ Committee. Here’s what she reported to US Bankruptcy Judge Shelley Chapman:
“The United States Trustee has contacted the 30 largest unsecured nonpriority creditors listed in the petitions and attempted to form an Official Unsecured Creditors’ Committee in these cases. However, as of this date, an insufficient number of creditors have indicated a willingness to serve on such a Committee. Accordingly, the United States Trustee is unable to appoint a Committee in these cases, pursuant to 11 U.S.C. § 1102(a).”
Now that ICMC and its related entities have begun voluntary Chapter 11 proceedings the senior creditors — Yucaipa Companies, Fortress Credit Lending and Drawbridge Special Opportunities Fund (which is also a Fortress fund) – have formally withdrawn their hostile petitions to force the radio station owner into involuntary bankruptcy.
ICMC has indicated that it will file a reorganization plan agreed to by the senior creditors by mid-October. That will, among other things, provide for 100% payment of what’s due to unsecured general creditors. Now that the Chapter 11 proceeding is on a fast track the company hopes to emerge from bankruptcy court oversight by the end of 2011.
RBR-TVBR observation: As we’ve noted before, Inner City is selling plenty of ads and generating plenty of revenues to cover its operating costs. That’s likely why the unsecured creditors are so blasé about the Chapter 11 proceeding. It’s all about the quarter billion dollars in senior debt.
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