Below is our initial take on recent bankruptcy-related developments:
The company claimed various challenges, including a lawsuit filed against Neilsen Audio over an updated 2024 policy that would require radio companies to buy data separately for all local markets in which they operate.
S&K Take: Cumulus filed a prepack on Wednesday in the SD Tex., its second bankruptcy (the first was in 2017), with about $46 million in cash on hand and an RSA with existing secured claim holders that would effectuate a debt-for-equity swap. The Debtors currently carry about $700 million in funded debt, and the RSA would deleverage by approximately $529 million. Post-reorg equity value ranges from $89 to $149 million according to the Debtors’ investment banker. GUCs would ride through unimpaired. The Debtors anticipate the process would take about 4 to 6 months. The case got off to a good start yesterday, with an uncontested first day hearing in front of Judge Perez that saw cash collateral usage approved. The second day hearing is scheduled for March 25.
Jack Nicklaus had previously filed a $50 million defamation lawsuit against Nicklaus Cos., the company bearing his namesake.
S&K Take: We have covered the Nicklaus case before. The case has had a fair number of twists and turns, and at bottom is a battle between the Golden Bear and Howard Milstein over control of the company. Looks like that has finally been resolved. The Debtors were in the midst of a sale process which had been extended twice, with Iconix Brands acting as the stalking horse with a $50 million bid. In what seems to be a surprising result, 20 Majors LLC was selected as the winning bidder with a $35.7 million bid. The reason that the bid was deemed to be highest and best was because 20 Majors’ bid was tied to a settlement which would include releases of claims between Nicklaus and Milstein. 20 Majors is managed by Rory Brown, who also manages a family office with Jack Nicklaus’s son, Gary. If you are doing the math, Nickalus won 18 majors and 2 US Amateurs. A seemingly elegant end to what had been a messy case, with the Golden Bear reclaiming his IP.
A New York bankruptcy judge ruled that opt-out boxes, which were in the design for The Roman Catholic Diocese of Buffalo’s Chapter 11 plan ballots, cannot be used to record creditor consent to third party releases.
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S&K Take: Another data point on what “consensual” means with respect to releases. The WDNY ruled that opt-out releases were insufficient, and that affirmative consent was required for creditors to release non-debtors, in this case, the Parishes. The Diocese cases are very sensitive for obvious reasons, however, so query whether the precedent has to be discounted to some extent.
