iHM Wins Dismissal of Gamco Asset Management Suit

[Y2kTheNewOldies]

http://news.****************/cgi-bin/rol.exe/headline_id=b14917

iHeartMedia won dismissal of Gamco Asset Management's lawsuit that radio giant shortchanged investors by diverting revenue from its outdoor advertising unit Clear Channel Outdoor. Delaware Court Judge Joseph Slights ruled in favor of iHM and dismissed the lawsuit filed by Gamco. The firm failed to prove iHM violated legal duties to shareholders with the revenue transfer. The judge ruled that Gamco couldn't show iHM "extracted a unique benefit" by paying down debt with CCO's funds that "came at the expense" of other investors.

As previously reported, senior creditors, including Gamco, had complained iHM's transfer of Clear Channel Outdoor Holdings shares to a different subsidiary violated loan terms and drained assets that could be used to repay roughly $423 million in debt that is due in the next two years on $20 billion in debt.

Transparency issues to investors were at play here.

 

[umfan]

They lived to fight for a bit longer. The next major debt expiration will find them without a significant asset like CCO to sell, not enough cashflow to repay the debt, and no one willing to refinance it.

At that point they re-organize with a debt for equity swap.

 

[TheBigA]

The next major debt expiration will find them without a significant asset like CCO to sell, not enough cashflow to repay the debt, and no one willing to refinance it.

I think you're forgetting about the iHeartRadio digital platform. This is something they created since going private. This platform is valued at abut $2Billion, and they could spin it off or break it out as a self-sustaining asset to finance the rest of the debt. The other thing you're not considering is the FCC's change in foreign investment rule. American media companies are more valuable to foreign investors than American ones. So things aren't as dire as you suggest. The companies in far worse shape are those who haven't invested in new platforms or assets. They are stuck with conventional debt.