How many ways can you keep debt at bay? Does non-payment sound like a viable option? Perhaps not if you’re just a mere flesh-and-blood human, but the corporate beast’s a special class.
Over at iHeartMedia, $250 million of the company’s $20+ billion debt came due last Thursday (December 15). In a surprise move, the company announced two days before that it would only be paying back just $192.9 million of these notes and foregoing the rest.
The reason? This debt constitutes money that various subsidiaries of iHeartMedia owe to each other. In addition, these particular debt instruments contain a provision that, should the total debt held between these entities fall below $500 million, it would trigger a “springing lien.” This is a fancy term for extra payments owed to debtors as an incentive for giving the conglomerate a nice line of credit.
By witholding $57.1 million of these payments, iHeartMedia’s total debt in this instance doesn’t fall below the threshold, and thus the company can avoid making the bonus-payments to creditors. To stymie any objection to this ploy, iHeart went to the friendly Bexar County, Texas courts and filed a flurry of paperwork last Monday (to give you an idea of how complex its debt structure is, there 11 petitions in all, involving six
Clear Channel iHeart subsidiaries), asking a judge to declare this practice kosher. Continue reading “iHeartMedia, Cumulus Go Debt-Offensive”
After fending off one legal challenge that would’ve sent the company into default, the nation’s largest radio conglomerate now seeks a spot of revenge.
iHeartMedia is heading back to a Texas courtroom in hopes of getting mega-damages out of a consortium of investors who went after the company, serving a notice of default for playing fast and loose with its $20+ billion worth of debt — a strategy which involves iHeart setting up shell companies to repurchase some of the debt it already owes at lower interest rates, while also working to shield some assets from potential creditors. The conglomerate filed suit to stop the default process, and the Bexar County judge sided with iHeart in May. Continue reading “iHeartMedia Seeks Pounds of Flesh for Bankruptcy Pressure”
iHeartMedia’s lawyers are probably very happy to see May in their rearview mirrors, after dodging a bullet in a Texas courtroom last week. A friendly judge barred the company’s creditors from seeking notices of default on some $6 billion of iHeart’s $21 billion in corporate debt, racked up primarily from pillaging the radio industry over the last 20 years.
iHeart’s creditors were attempting to call out the company for constructing a shell game in an attempt to keep its debt from crushing it. They noticed last year that the company had begun transferring hundreds of millions of dollars in assets to two “independent” subsidiaries named Broader Media and CC Finco. In simple terms, having already borrowed tens of billions against hundreds of stations, thousands of billboards, and countless other media ventures, iHeart moved some of those assets to “new” corporate parents, thereby creating “new” value against which to borrow even more money. Even better, this shuffle protected those assets against existing debt claims. Continue reading “iHeartMedia Dodges Bankruptcy, Option Remains”
Good news for iBiquity et al.: a simmering fight with patent trolls seeking recompense from hundreds of broadcasters and auto manufacturers over their implementation of HD Radio has been quashed.
The trolls folded first. On April 23, Delaware Radio Technologies and Wyncomm LLC notified the Federal District Court in Delaware that they wanted to terminate their lawsuits “with prejudice,” meaning they cannot be refiled. iBiquity, who countersued the trolls last year, moved for dismissal of its case on May 6. Continue reading “Patent Troll Gives Up on HD Radio”
In many respects, I feel sorry for FCC Commissioner Mike O’Rielly. He’s the #2 Republican on the five-member panel – the politically-weakest Commissoner. And he’s had to languish in the shadow of fellow Republican Ajit Pai, who’s commandeered the minority party’s bully pulpit on a plethora of issues ranging from journalistic independence to network neutrality.
So O’Rielly’s got to make a name for himself somehow, and he’s choosing pirate broadcasting as an issue on which to try. Last week, he published a blog post wherein he lays out some cockamamie suggestions on how to handle “the sourge” that is unlicensed broadcasting. Key to O’Rielly’s proposal is…the CAN-SPAM Act? Continue reading “Should Broadcasters Sue Pirates?”
A judge in Delaware’s federal District Court has put the brakes on a patent troll’s carpetbombing of the radio industry. For those just tuning in, some ambiguous firms in Delaware acquired some old AT&T patents that vaguely describe digital data transmission. Armed with these, the firms filed a slew of lawsuits in 2013 against broadcasters who’ve deployed HD Radio technology, claiminng that the system infringes on their intellectual property.
iBiquity Digital Corporation, HD’s proprietor, filed a counterclaim last year seeking the dismissal of the trolls’ crusade and the voiding of its patent claims. If the trolls want to bilk anybody, iBiquity is the logical target, as it controls all of its intellectual property with a firm hand. Furthermore, the station’s license agreement with broadcasters indemnifies stations against such claims. Continue reading “Patent Troll Suffers Setback in HD Lawsuits”
It’s been a busy year for iBiquity Digital Corporation in court, as it fends off attacks on its HD Radio patents and licensing structure. In both cases, iBiquity seems to have dodged a few bullets and may even have the upper hand. However, they also illustrate the tenuous nature of HD’s adoptive trajectory. Continue reading “iBiquity Lawyers Up to Defend Patents and Business Model”
My “day job,” so to speak, is an anchor/producer gig with WINS – the Workers Independent News Service. WINS is a syndicated radio news program that features stories of, by and for working people: we like to think of ourselves as an antidote for what passes as “business news” on the radio today. Where the corporate media tells you which stocks are up or down, we tell you who got screwed behind the stock moves.
Five days a week we produce one ‘headline-style’ newscast (three minutes in length), with a 30-second economic report (a little factoid capsule called the “Dow Bob”), and longer-form feature stories, many of which we get from independent stringer-reporters around the globe.
WINS programming is distributed via the internet in MP3 format through our web site, and in the 14 months or so that we’ve been in production we’ve built up an affiliate list of about 80 radio stations around the United States. We charge between $20-$40 a month for stations to subscribe, which gives them access to everything we do, to use as they see fit. Continue reading “When Viacom Attacks”