Mega Company Transaction - iHeartMedia
Robert Walls, iHeartMedia
Rachel Murray, Moelis & Company
Adam Keil, Moelis & Company
Anup Sathy, P.C., Kirkland & Ellis, LLP
Paul McNicol, iHeartMedia
Justin Schmaltz, Alvarez & Marsal
James H.M. Sprayregen, Kirkland & Ellis, LLP
Jeff Stegenga, Alvarez & Marsal
Steven Macri, iHeartMedia
William Derrough, Moelis & Company
Lauren Dean, formerly iHeartMedia
Hon. Marvin Isgur, U.S. District & Bankruptcy Court, Southern District of Texas
Hon. Lee Rosenthal, U.S. District & Bankruptcy Court, Southern District of Texas
Thomas Walper, Munger Tolles & Olson LLP
Brian Wolfe, Kirkland & Ellis, LLP
About the Transaction:
iHeartMedia is one of the world’s leading global multiplatform media, entertainment, and data companies. iHeart is the largest radio broadcaster in the United States and specializes in radio, digital, outdoor, mobile, social, live events, on-demand entertainment, and information services for local and national communities. The company had consolidated debts of more than $20 billion stemming from a $27 billion leveraged buyout that closed six weeks before Lehman Brothers’ collapse in 2008. Its Chapter 11 cases, which were the largest of 2018 based on outstanding debt, restructured more than $16 billion of that debt. In connection with its restructuring, iHeart reached an agreement with holders of more than $11 billion of its debt and its financial sponsors, reflecting widespread support across the capital structure, regarding a comprehensive balance sheet restructuring that reduced iHeartMedia’s debt by more than $10 billion and separated iHeart's business from Clear Channel Outdoor Holdings (CCOH), a $1.7 billion publicly traded company that did not file for Chapter 11 and was owed approximately $1 billion from the debtors.
Kirkland & Ellis, Alvarez & Marsal, and Moelis & Company led a team that successfully designed, negotiated, and implemented a restructuring transaction that delivered value to every class of creditors and equity holders, including approximately $500 million of value to junior stakeholders. Each class entitled to vote overwhelmingly voted in favor of the plan. The plan also provided for the separation of iHeart’s business from Clear Channel’s business pursuant to a comprehensive multiparty settlement that contemporaneously resolved non-bankruptcy court litigation with certain of Clear Channel’s minority shareholders. The settlement was ratified by independent directors at both iHeart and CCOH, and was effectuated through a novel use of the class action rules. It was approved by both the Bankruptcy Court and the District Court sitting in tandem.
iHeart's plan was confirmed over a series of three confirmation hearings and was ultimately fully consensual among the company's economic stakeholders. Every class under the plan was entitled to a recovery, and every class voted to accept the plan.