iHeartMedia – Reaches Agreement with Legacy Noteholders, Clears Last(?) Major Hurdle to Plan Confirmation

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January 17, 2019 – The Debtors notified [Docket No. 2207] the Court hearing the iHeartMedia case that they had reached an agreement in principle with Wilmington Savings Fund Society, FSB (the “Legacy Notes Trustee”) regarding a settlement and related proposed modifications to the Debtors’ Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of iHeartMedia, Inc. and the restructuring term sheet annexed to the Restructuring Support Agreement, dated as of March 16, 2018 (the “RSA”).

Legacy Notes Settlement Summary (defined terms are as defined in the Amended Plan”)

Treatment of Legacy Notes Claims:
 
Under the further Modified Fifth Amended Joint Chapter 11 Plan (the “Amended Plan”), in addition to the recovery already provided for holders of Allowed Legacy Notes Claims in the Plan, Holders of Allowed Legacy Notes Claims shall receive their pro rata share of an additional 0.2% (the “Additional Legacy Notes’ Recovery”) of Special Warrants, New iHeart Common Stock, or a combination of Special Warrants and New iHeart Common Stock, as determined in accordance with the Equity Allocation Mechanism (“Reorganized iHeart Equity”).
The Reorganized iHeart Equity portion of the Additional Legacy Notes’ Recovery will be provided through the following reductions of Reorganized iHeart Equity: (i) holders of 2021 Notes Claims shall have their aggregate recovery of Reorganized iHeart Equity reduced by 0.1%; and (ii) the Consenting Sponsors shall have their aggregate recovery of Reorganized iHeart Equity on behalf of their iHeart Interests reduced by 0.1%.
Further to the Amended Plan, the Legacy Notes Claims shall be Allowed against iHC in the following amounts:
  • 5.50% Senior Notes due 2016: $57,885,125
  • 6.875% Senior Notes due 2018: $178,007,813
  • 7.25% Senior Notes due 2027: $309,062,500

Debtors’ Commitment:
The Debtors agree to (i) waive any right to recover costs pursuant to the judgment entered in adversary proceeding case number 18-03052 (the “Springing Lien Adversary Proceeding”) [Docket No. 264], (ii) to waive all claims, causes of action, obligations, and indemnities arising under the letter agreement by and between Kingdon Capital Management, L.L.C. and the Debtors dated October 20, 2014 and (iii) promptly file, and seek confirmation of, the Amended Plan.

Consenting Legacy Noteholders’ Commitment:
The Consenting Legacy Noteholders (ie, holders of the notes listed above) and the Legacy Notes Trustee agree (i) to affirmatively support the Amended Plan and (ii) to (a) not prosecute any appeal of the Springing Lien Adversary Proceeding, (b) suspend indefinitely adversary proceeding case number 18-03287 (the “Equitable Subordination Adversary Proceeding”), (c) suspend indefinitely the Objection of Wilmington Savings Fund Society, FSB, as Successor Indenture Trustee, to Proof of Claim No. 3833 [Docket No. 1681] (the “CCOH Claim Objection”) and (d) suspend indefinitely the Legacy Notes Trustee’s joinder to the Standing Motion [Docket No. 1104] (the “Standing Motion Joinder”).
Effective Date:
On the Effective Date, the Equitable Subordination Adversary Proceeding, the CCOH Claim Objection, and the Standing Motion Joinder shall be deemed dismissed with prejudice without any further action required by any party, and the Consenting Legacy Noteholders and the Legacy Notes Trustee shall move to dismiss any appeal of the Springing Lien Adversary Proceeding with prejudice. The prepetition springing lien litigation pending in New York state court shall also be dismissed with prejudice. The Consenting Legacy Noteholders and the Legacy Notes Trustee shall take any and all steps necessary to effectuate the foregoing

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