U.S. Bankruptcy Judge Burton Lifland in Manhattan refused requests by shareholders to delay court approval to exit bankruptcy and approved Citadel Broadcasting's reorganization plan yesterday. In a crowded courtroom, Shareholders represented by Aurelius Capital Partners LP contended that bankers were valuing the company too low, which would deny owners of stock any hope of recovery of their investment.
After a nine hour, dramatic hearing, Lifland ruled “The debtor has met the burden of confirmation." Citadel had filed for Chapter 11 protection in December explaining that the recession had “put a chokehold on advertising spending,."
The new plan gives holders of $2.14 billion of secured debt, a new $762.5 million loan and 90% of the share of the reorganized company. Holders of unsecured claims will receive the remaining 10% and $36 million in cash. Equity holders will not receive anything.
More on the story from Don Jeffrey who covered the event for Bloomberg news..