State Champ Radio bankruptcy
Radio company Audacy has reached a deal with a supermajority of lenders for a prepackaged Chapter 11 bankruptcy deal that will reduce its debt from $1.9 billion to $350 million, the company announced Sunday (Jan. 7). The agreement, first disclosed last week by The Wall Street Journal, will give Audacy’s debt holders equity in the reorganized company.
Chapter 11 proceedings began on Sunday in the United States Bankruptcy Court for the Southern District of Texas. Audacy filed a proposed plan of reorganization that incorporates the terms of the agreement with lenders. The company expects the court to hold a confirmation hearing in February and to exit bankruptcy proceedings once it receives FCC approval.
Some of Audacy’s lenders have committed to providing $57 million in debtor-in-possession financing — $32 million from a term loan and $25 million from an increase in an existing accounts receivable financing facility. The financing, along with the company’s cash from operations, will help Audacy maintain its operations and pay its employees, vendors and partners.
Once the plan is approved by the court, the terms of the current board of directors will expire and a new board of directors will be assigned. The plan of reorganization calls for the new board of directors to adopt a management incentive plan to reward employees and directors of the reorganized company. The plan will set aside 10% of new common stock for stock options, restricted stock, appreciation rights and other equity-based awards.
A 2017 merger with CBS Radio helped Audacy — then named Entercom — expand its business but also increased its debt load. The interest payments would have been more manageable in a growing business, but “the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending,” David J. Field, Audacy chairman/president/CEO, said in a statement. “These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring.”
The Philadelphia-based company’s portfolio of about 230 radio stations includes WCBS in New York, KROQ in Los Angeles, WFAN Sports Radio in New York and WBBM Newsradio in Chicago. Audacy’s podcasting brands include two studios, Cadence13 and Pineapple Street Studios, and Popcorn, an online marketplace for connecting creators and brands.
Sunday’s announcement eliminated nearly half of Audacy’s remaining equity value as the company’s share price fell 47.1% to $0.1058 on Monday. Audacy has traded over the counter since it was delisted from the New York Stock Exchange in May. A 30-for-1 reverse stock split increased the share price from $0.07 to $2.13 on June 30, but the stock lost nearly all its value over the next six months as financial problems mounted.
Audacy is expected to file for Chapter 11 bankruptcy after reaching an agreement with its lenders, according to a report at the Wall Street Journal. The prepackaged bankrupcy would be financed by the lenders, who would take ownership of the radio company following the restructuring, the report said.
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An Audacy spokesperson had no comment when contacted by Billboard.
Audacy, formerly named Entercom, is saddled by $2 billion in debt acquired primarily from its 2017 merger with CBS Radio. That deal expanded Audacy’s revenue but also increased its debt nearly fourfold from $468 million at the end of 2016 to $1.86 billion at the end of 2017.
The Philadelphia-based company’s portfolio of about 230 radio stations includes WCBS in New York, KROQ in Los Angeles, WFAN Sports Radio in New York and WBBM Newsradio in Chicago. Audacy’s podcasting brands include two studios, Cadence13 and Pineapple Street Studios, and Popcorn, an online marketplace for connecting creators and brands.
The company sounded alarm bells in May when it warned that a weak financial outlook could cause it to default on its debt. In an SEC filing, the company said “macroeconomic conditions” such as rising interest rates and depressed advertising revenue “have created, and may continue to create, significant uncertainty in operations.” As a result, its forecasted revenue was “unlikely to be sufficient” to maintain its debt covenants.
Third-quarter revenue of $299.2 million was down 5.6% year over year and in early November its fourth-quarter revenue was on pace to decline 9% from the prior-year period. Noting the company’s “current challenges,” CEO David J. Field said Audacy was in conversation with its lenders to recapitalize its balance sheet.
In recent months, Audacy has reached agreements with a number of lenders to extend the grace periods for interest payments from a credit facility and outstanding notes.
Audacy was delisted from the New York Stock Exchange the May for violating the exchange’s rules on minimum share price. It has since traded over the counter. Although a 30-for-1 reverse stock split increased the share price from $0.07 to $2.13 on June 30, the stock lost nearly all its value over the next six months.
On Wednesday, Audacy shares closed at $0.1896 per share, giving the company a market capitalization of less than $900,000.
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Source: Udo Salters / Getty / Cardi B / Tasha K
Tasha K will still have to find a way to run Cardi B her coins for lying on her name.
YouTuber Latasha Kebe, aka Latasha K, found out the hard way that you can’t hop on Al Gore’s internet and say anything you want about people, especially one of the most popular Hip-Hop artists in the world.
Tasha K tried her best to avoid paying Cardi B more than $3.4 million she was awarded in January 2022 by a judge in a defamation lawsuit by filing for Chapter 11 bankruptcy in May.
Unfortunately for Kebe, Judge Scott M. Grossman hit her with a gut check by ruling she is still on the hook for that massive check that her mouth wrote that her ass couldn’t cash.
Per Digital Music News:
Judge Scott M. Grossman ruled on Thursday, October 5, that Kebe cannot “discharge” the $3.4 million owed to Cardi B through her Chapter 11 filing — so she’ll still be on the hook for the payments even after exiting bankruptcy. While bankruptcy law allows insolvent individuals to evade certain debts, money owed because of “willful and malicious injury” caused to others is an exception.
Attorneys for Cardi B insisted that the exception undoubtedly applied here, as Kebe incurred the debt through “spreading false and defamatory statements” intended to cause career damage to their client. Kebe’s lawyers offered no rebuttal, and Judge Grossman ruled on Friday that the money owed was ineligible for discharge.
Welp.
A Brief Rundown of The Lawsuit
Cardi B, born Belcalis Almanzar, let Kebe know she had time when she hit Kebe with a lawsuit over what she describes as a “malicious campaign” on social media and YouTube with the intent to harm the “Bodak Yellow” rapper’s reputation.
In the videos that Cardi B’s attorney failed numerous times to have taken down, Kebe alleged that the Bronx native had herpes, was a prostitute, took drugs, and cheated on her husband.
Those words from Tasha K would cost her cause now she is screaming broke to avoid Bardi, but that argument has fallen flat.
Hopefully, Kebe’s misfortune will serve as a lesson to other gossip bloggers.
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Photo: Udo Salters / Getty
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A national Black Lives Matter organization is at risk of going bankrupt after tax records reveal that the national organization has been paying out millions to executives while being millions in the red. According to the records, the leading Black Lives Matter foundation is operating at an $8.5 million deficit despite paying out millions in salary.
As reported by Newsweek, the Black Lives Matter Global Network Foundation’s (BLMGNF) financial woes stemmed from the 2022 tax year in a report first published by The Washington Free Beacon. The organization showed a loss of $961,000 in connection to a $172,000 securities sale. The foundation is not the only organization that operates within the nonprofit sector in support of Black Lives Matter but it is the largest of its sort.
At the root of the foundation’s problems is lowered donations from the public, reporting $9.3 million between July 1, 2021, and June 30, 2022, with assets totaling $30 million. This is a large drop from the foundation’s July 1, 2020, and June 30, 2021 filings of the previous year.
BLMGNF co-founder Patrisse Cullors was the center of controversy after the foundation came under scrutiny for its donation haul and spending practices. Ms. Cullors has since stepped down after admitting last year that the foundation could not sustain the number of donations received although millions were spent in what some viewed as frivolous in certain areas.
Adding to this, Paul Cullors, the brother of Ms. Cullors, continued to be paid for “professional security services” by the foundation to the tune of $1.6 million despite Ms. Cullors no longer serving in her previous role. Mr. Cullors was given a base salary of $124,702 in his role as head of security. The rest of the funds went to companies that Mr. Cullors owns.
The foundation’s board secretary, Shalomyah Bowers, who owns Bowers Consulting, was paid just under $1.7 million for consulting and management services. Bowers has been accused by Black Lives Matter Grassroots of misappropriating funds for his own personal use according to a Los Angeles Times report.
The foundation has yet to make a public statement regarding its finances.
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Photo: SOPA Images / Getty
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