Claiming that covenants were violated, creditors had filed the notices of default to the largest owner of U.S. radio stations. However, iHeartMedia has recently won a temporary restraining order rescinding certain notices of default received from senior creditors who objected to a stock transfer.
According to Sun Times Network, the San Antonio Texas-based company, has been defending itself from creditors, who are a group made up predominantly of hedge funds. The creditors filed their complaint after iHeartMedia allegedly moved Clear Channel Outdoor Holdings Inc. shares to another contributor, which is the Broader Media LLC.
This week, the largest San Antonio radio station company also received a default notice from the creditors, in dispute that the transfer is technically an evasion. As the lawsuit to iHeart noted, the senior creditors also said that they could call their debt due in 60 days for a total of more than $6 billion. The court case also claimed that the creditors' actions threaten to compel the company into bankruptcy.
On the other hand, Express News reported that a Bexar County District Court issued a temporary restraining order on Wednesday. This is an effort to prevent creditors of San Antonio-based company from forcing some of the company's ties into default.
The senior creditors represent over 25% of the outstanding bonds in four of iHeartMedia's series of priority guarantee notes. "We believe the contribution constituted a permitted investment under, and fully complied with, our financing agreements. We are pleased with the outcome of today's hearing," as said in an iHeartMedia statement on Wednesday. It also added, "We continue to evaluate opportunities to strengthen our balance sheet."
Reuters claimed that the restraining order iHeartMedia won would expire within 14 days. But according to a public filing from the company, the court may extend it. The order would also halt the creditors from issuing additional notices of default to iHeart.
Meanwhile, in a statement made by iHeart, it expressed its excitement with the result of the filing of the order. It also stated that the radio station company looks forward to a favourable ruling in court.
