Audacy is asking a judge to close the last remaining case in its bankruptcy proceeding.
Bankruptcy Judge Christopher Lopez approved the company’s reorganization plan in February 2024, and closed the reorganization in October, except for one remaining open case in Texas. Now the judge will decide on Audacy’s most recent request, which came in late December, to close the lone remaining case.
The remaining case was left open to address any outstanding issues in the Chapter 11 cases, including fee applications for retained professionals, the company said. There are “no other pending matters before the court,” Audacy says in the court document.
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In its filing, Audacy says it has settled the final remaining pending case tied to the bankruptcy filing and seeks entry of a final decree closing the case. “All of the foregoing factors weigh strongly in favor of closing the remaining case,” the broadcaster wrote in the filing.
To recap, Audacy petitioned for voluntary Chapter 11 bankruptcy on Jan. 7, 2024. The reorganization proceeding allowed it to trim its debt from $1.9 billion to about $350 million.
The radio company currently has more than 220 radio stations in 45 markets. The broadcaster was forced to spin-off one FM station in Forest City, N.C., as a result of the bankruptcy reorganization.
The bankruptcy reorganization allowed Audacy to secure new loans and update its financing structure. Its voting stock is now controlled by two organizations, Laurel Tree Opportunities Corporation and MBX Commercial Finance, according to the company’s restructuring documents.
Business reasons exist that favor closing the remaining case, Audacy told the judge. “Specifically, until the remaining case is closed, the reorganized debtors will continue to pay the U.S. Trustee fees and expend resources complying with reporting requirements,” the broadcaster says.
The FCC gave its approval to Audacy’s restructuring plan in September 2024, in a 3-2 vote along party lines with incoming FCC Chair Brendan Carr voting against it. There were complaints from conservatives about the ownership share billionaire liberal philanthropist George Soros has in the new Audacy. Soros Fund Management is run by his son, Alex Soros, and is a major investor in Laurel Tree Opportunities Corp.
The Soros connected company purchased up to $400 million of Audacy debt and was repaid with stock in the restructured radio and podcast company. The Soros family is estimated to hold a 40% stake in the new Audacy.
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In approving the company’s bankruptcy, the FCC agreed to temporarily waive the 25% cap on foreign ownership in broadcast companies, which proved controversial. Audacy still needs to complete the FCC’s approval process of foreign ownership.
Audacy exceeded the 25% foreign ownership cap implemented by the Communications Act. The broadcaster currently has 27.2% foreign ownership, according to an Audacy spokesperson. It is seeking FCC approval of up to 49.99% foreign ownership.
The commission has been more open to expanding the caps on foreign ownership. A growing number of U.S. radio groups have sought similar approval. For comparison, the Audacy spokesperson says the FCC has approved petitions from iHeart Media and Cumulus Media for up to 100% foreign equity ownership.
Carr, at the time of the FCC vote, said the commission adopted a “special shortcut” to approve Audacy’s reorganization. He has since been quoted by several media outlets as saying the company’s reorganization will receive fresh scrutiny when he ascends to commission chair in January.
Several members of Congress have also pressed the FCC for a more thorough review of the approval process.
Audacy will no longer be a publicly traded company. It will transform from a Pennsylvania corporation into a Delaware LLC post-bankruptcy.
