Radio/audio giant Cumulus Media has filed for Chapter 11 bankruptcy, in what is called a prepackaged agreement designed to eliminate $600 million in debt. Company operations are expected to continue as usual.
Prepacked agreements put the solution before the emergency, in a sense — a reorganization plan is developed and approved by creditors in advance. The arrangement often shortens the bankruptcy timeline, reduces legal costs, and lessens disruption within the company. The Cumulus filing was made in a bankruptcy court in Texas.
We find this description of the bankruptcy arrangement: “100% of existing funded debt will be canceled in exchange for 100% of the equity in the reorganized company and $50 million in new convertible notes.
The Cumulus radio network encompasses 394 stations, and the plan is for day-to-day operations to continue without disruption to employees or advertisers.
This economic restructuring is the second bankruptcy for Cumulus, following a similar filing in 2018.
