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ITS OFFICIAL: Citadel Files For Bankruptct

O

OHTBGH

So tomorrow all the share holders will be wiped out if this goes through.

Wondering how many released and current employees have stock in the company? Sulaman has still a pretty good chunk.

The shareholders had a chance to fire the board at the last shareholders meeting but didn't. (I voted to have them removed.)

But nooooooooo. They had complete confidence in them!

Its not over yet though. Many hedge and mutual fund manager have ALOT of Citadel on their books. This is also the time of the year they don't like to rock the boat. I read one fund has as much as 29% of their funds in Citadel alone! (Wells Fago had a 15m + chunk it sold last week as well.)

So hopefully the shareholders will put a class action together and retain somewhat of a settlement.

And if this deal DOES go through, the first thing they should do do is wipe out Sulaman and the entire board!!!

-BGH
 
OHTBGH said:
So tomorrow all the share holders will be wiped out if this goes through.

Wondering how many released and current employees have stock in the company? Sulaman has still a pretty good chunk.

The shareholders had a chance to fire the board at the last shareholders meeting but didn't. (I voted to have them removed.)

But nooooooooo. They had complete confidence in them!

Its not over yet though. Many hedge and mutual fund manager have ALOT of Citadel on their books. This is also the time of the year they don't like to rock the boat. I read one fund has as much as 29% of their funds in Citadel alone! (Wells Fago had a 15m + chunk it sold last week as well.)

So hopefully the shareholders will put a class action together and retain somewhat of a settlement.

And if this deal DOES go through, the first thing they should do do is wipe out Sulaman and the entire board!!!

-BGH
Click to expand...

I'll never understand how media companies can go bankrupt...seems like a license to print money to me...can management really be that bad??
 
dfwrunner said:
I'll never understand how media companies can go bankrupt...seems like a license to print money to me...can management really be that bad??
Click to expand...

It's all relative. There's a lot of cash coming in, but a lot of expenses, and they over-borrowed when they bought ABC. The thing that got them was a promise to have so much cash on hand on certain dates, and it was obvious they weren't going to make it. So the lenders called them on it.

To me, the real story is how and why the banks pulled this play on them at this time. Clear Channel has been on the brink for a long time, but their lenders keep holding out. The majority owner in Citadel was an investment company (Forstmann Little) that stands to lose all its money ($2 billion). This could have been a power play by the lenders to get rid of them. So now, the investment company is out, and the banks are in. Lots of other companies are facing the grim reeper, but few fall as quickly as this one. Why would a major multi-billion dollar investment company, one with so much to lose, let it all go without a fight? Unless they're out of money too. It won't be the first time for Forstmann Little.
 
The interest payments are the biggest killers. Holders wanted Citadel to sell the lower end stations for more cash flow and keep the stock price up so They could use that capital but the board would not hear of it.

I'd think that with the egos in this business that they would do ANYTHING to have kept it from getting to this point. Karmazin is one of those egos and even he pulled the stick back!

But when no matter what happens you still get to keep your own job, Why even be motivated?

-BGH
 
You can bet the name change from ABC Radio to Citadel Media was done under pressure from ABC/Disney to prevent the ABC brand name being dragged through the mud in a bankruptcy. Western Union did the same thing in 1991, changing their name to "New Valley Corp" a few months before filing Chapter 11.
 
OHTBGH said:
But when no matter what happens you still get to keep your own job, Why even be motivated?
Click to expand...

He keeps his job, but loses his 3% share of the company, which was worth at one point, a ton of money. And when he's done sweeping up the remains, he'll never get hired again. Not that anyone should cry, but there are consequences here. I have no reason to believe he did this willingly.
 
Ego (and lots of it) has a lot to do with it.

"What, you'd let this corporation go in the toidy and you would lose all that money you lent, because you'd never get a dime back, so, why not have 66% of you just rewrite a deal, forgive, say, $1.5 billion of the debt principle and interest, and I'll give you 95% of the bidness?"

Such a deal.

Banks don't like to lose with end-of-year "write downs" like they would face if they didn't make a "deal."

The powers that be rolled the dice without blinking and the banks get some principle, interest (higher) and 95% of the profits, plus equity of some valuable property to do with as they wish. The don't like what's happening, they sell off the assets and make their money back -- and 95% of anything remaining.

If the economy rebounds, asset value goes up, the banks make more money, Suleman is "bailed" out, the investors get totally shafted by losing their investments and the company starts all over again.
 
oaktree said:
Such a deal.

Banks don't like to lose with end-of-year "write downs" like they would face if they didn't make a "deal."
Click to expand...

Banks do deals like that every day. They're writing off a lot of loans. Home loans, business loans, personal loans. That's what the TARP was supposed to cover. Plus, have you looked at bank interest rates lately? They are paying nothing in interest, but still charging 5% for loans. If you can get one. The banks are making lots of money. Don't feel sorry for the banks.

It gives the broadcasting industry a black eye, and it will take a lot to get anyone to ever give them any money. Take a look at their creditor list. These are companies they deal with every day. They will have to re-establish credit with all of them again. Starting from scratch isn't easy. This is not a piece of cake for Citadel, and there is a long list of companies who've re-organized under Chap 11, and still haven't survived.
 
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