Chattanooga Format Switch

[Kent T]

Citadel was in bankruptcy! The Bankruptcy court would not allow LMA payments so Citadel had to let 100.3 go back to it's owner. No choice for Citadel to do.

 

[Tennessee Cowboy]

Citadel had a choice. It was to have a judge void the LMA and go back to JP looking to pay him less. JP's response likely included an invitation to kiss a part of his anatomy, and his opinion on an unusually close relationship between Citadel managers and their mothers.

 

[Kent T]

If you can pay an LMA fee of any kind, bankruptcy court says you can pay the rest of your bills without their help. So LMA contracts are nulled out when in bankruptcy court. So, no Citadel option but to give 100.3 back to Oak Ridge FM, Inc nee Johnny Pirkle.

 

[secondchoice]

If you can pay an LMA fee of any kind, bankruptcy court says you can pay the rest of your bills without their help.

If the Judge said this, Citadel’s Lawyers might have messed up.

LMA fees which are structured similar to lease payments and should be treated the same. They can be “continued” with the court's OK. Unless there is a FCC rule about LMA’s and Bankruptcy, the Judge can do just about anything he (she) wants under the guise of recovering “assets”. Often leases are reworked thru bankruptcy, airlines to this all of the time. The financial “slang” for this is haircut. This often works because the lease holder does not have the means or does not want the expense reclaiming the asset in question. I guess somebody at Citadel figured they could get a better deal thru bankruptcy. Citadel might have over played the hand (again) in Knoxville. Just like they overplayed their hand when the bought ABC Radio.

Usually a corporation that is headed for bankruptcy Lawyers’ will “shop” for a court that will “rubber stamp” managements plan. That is why most Airlines use the Chicago Court (Northwest and Delta are the most recent). As big as the Citadel Bankruptcy was Knoxville was discussed? The Judge’s main goal is supposed to be getting the debt holders the most of their money back. By law the non executive employees regular pay check is first. He can void a contracted severance package if he finds it “excessive”. Vendors and bond holders have to “fight” it out. Shareholders are screwed.

One of the best example leases (which on most balance sheets is an expense or liability) being assets is Sears Holdings. IIRC (his name) Eddie Lambert purchased most of Kmart’s debt (for pennies on the dollar) and took ownership of Kmart thru bankruptcy. He then sold about one third to a half of K Mart’s 99 year transferrable store leases and ended up with enough money basically acquire Kmart for “free” and went on to gain control of Sears too. In weird way a bankrupt Kmart “bought” Sears! Of course it was Eddie not Kmart’s pre bankruptcy management (who could not run a lemon aid stand, much less a completive discount retail company).