Cumulus Files For Chapter 11

The first big shoe has fallen. Cumulus has taken a serious step to try to restructure its $2 billion in debt by seeking protection in bankruptcy court. Since former CEO Lew Dickey was pushed out over two years ago, company executives have made it clear the debt was a major issue and they needed to get it under control. It’s the first step to what may be a long process, because it appears not all lenders are on board. Here’s what they’ve done.

Cumulus has entered a Restructuring Support Agreement with some of its secured lenders, among others, that hold, in the aggregate, about 69 percent of its term loan; the agreement will reduce Cumulus’ debt by more than $1 billion, the company said Wednesday afternoon. To implement the balance sheet restructuring, it has filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York. The bankruptcy court must approve the plan.

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