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October 10, 2018 – iHeartMedia filed with the Court a Fifth Amended Joint Plan of Reorganization [Docket No. 1605] and a related Disclosure Supplement [Docket No. 1606]. The Disclosure Supplement notes, “Subsequent to the Bankruptcy Court entering the Disclosure Statement Order on September 20, 2018, the Debtors commenced solicitation of votes for the Fourth Amended Plan on September 28, 2018. Notwithstanding the Bankruptcy Court’s entry of the Disclosure Statement Order and commencement of solicitation, the Debtors and several of their key stakeholders, including the Committee, continued to negotiate a consensual resolution regarding the treatment of General Unsecured Claims set forth in the Fourth Amended Plan. On October 10, 2018, following extensive, arm’s-length negotiations, an agreement with respect to the treatment of General Unsecured Claims was reached among the Debtors, the Committee, the Required Consenting Senior Creditors under the Restructuring Support Agreement, and the Consenting Sponsors (the ‘Committee Plan Settlement’). As a result of the Committee Plan Settlement, the Committee fully supports Confirmation of the Fifth Amended Plan and the release provisions provided therein and will recommend that Holders of General Unsecured Claims vote to accept the Fifth Amended Plan and not opt out of the releases contained therein. A summary of the terms of the Committee Plan Settlement is set forth below, which terms have been incorporated into the Fifth Amended Plan:
- Each Holder of an Allowed Guarantor General Unsecured Claim (i.e., any Allowed General Unsecured Claim against a Guarantor Debtor that is not a TTWN Debtor) will receive such Holder’s Pro Rata share of the Guarantor General Unsecured Recovery Cash Pool. The amount of the Guarantor General Unsecured Recovery Cash Pool will be $17.5 million, subject to the adjustments described below, provided that in no event shall any such Holder receive a recovery less than 45 percent or greater than 55 percent on account of such Holder’s Allowed Claim.
- If the amount of Allowed General Unsecured Claims against Non-Obligor Debtors and TTWN Debtors exceeds $2.3 million, then the amount of the Guarantor General Unsecured Recovery Cash Pool will be reduced on a dollar for dollar basis by the amount of such coverage. If Holders of Allowed Guarantor General Unsecured Claims would receive a recovery of less than 50 percent, then the amount of the Guarantor General Unsecured Recovery Cash Pool will be increased by one-half of the amount of Cash that would be necessary to provide such Holders with a recovery of 50 percent (the ‘Additional True-up Cash’); provided that to the extent the amount of the Additional True-up Cash is insufficient to provide Holders of Allowed Guarantor General Unsecured Claims with a recovery of 45 percent on account of such Claims, the Additional True-up Cash shall be increased by the amount of Cash necessary to provide such Holders with a recovery of 45 percent on account of such Claims.
- Allowed General Unsecured Claims against iHC shall receive the same treatment as set forth in the Plan (i.e., a recovery of 14.44%); provided that that if the treatment to be provided on account of any other Allowed unsecured Claims against iHC (including any CCOH Due From Claims, 2021 Notes Claims, or Legacy Notes Claims) would provide the Holder(s) of such Claims with a greater percentage recovery on such Claims than would be received by Holders of Allowed General Unsecured Claims against iHC, the Holders of Allowed General Unsecured Claims against iHC will receive an additional Cash distribution such that their recovery percentage will equal the recovery percentage on any such other Allowed unsecured Claim against iHC.
- Due to all Holders of Allowed General Unsecured Claims now receiving a Cash recovery, the Class of Convenience Claims and the Convenience Class Election have been removed in the Fifth Amended Plan.
- The Committee and each member of the Committee, solely in their capacity as such, are included in the Fifth Amended Plan’s definitions of Released Party, Exculpated Party, and Releasing Party.
- The Fifth Amended Plan includes the waiver and release, as of the Effective Date, by the Debtors (on behalf of themselves and their Estates) of all Avoidance Actions arising under section 547 of the Bankruptcy Code or any comparable ‘preference’ action arising under applicable non-bankruptcy law.
- The Committee’s Standing Motion and the Disputed ABL Claims Objection will be held in abeyance and, on the Effective Date, shall be deemed withdrawn with prejudice. In addition, the Committee will hold in abeyance any potential claims against the Consenting Sponsors pending the occurrence of the Effective Date.
- The Fifth Amended Plan requires the Confirmation Order to provide that the General Unsecured Claims held by the Consenting Sponsors, other than General Unsecured Claims arising from or related to Indemnification Provisions, shall be deemed withdrawn with prejudice as of the Effective Date.”
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