iHeartMedia Wins Appellate Court Ruling

San Antonio’s Fourth Court of Appeals on Wednesday upheld a court ruling in favor of iHeartMedia Inc. after company debt holders tried to push the company into bankruptcy.

According to The San Antonio Express-News, court affirmed a May 2016 court ruling by Bexar County State District Judge Cathleen Stryker that blocked debt holders from filing default notices against the giant radio and billboard company.

In December 2015, iHM made an inter-company transfer of $516 million worth of stock in its billboard unit, Clear Channel Outdoor Holdings Inc., to another unit.

In March 2016, iHeartMedia filed a lawsuit seeking to stop a group of debtholders from issuing default notices. The debtholders, mainly hedge funds, said the transfer violated contract terms of the debt because the transfer did not meet a profit-seeking requirement.

“After reviewing the four corners in the indentures, we conclude that the pertinent language in the indentures is not ambiguous,” the appellate judges wrote in the court’s opinion, adding that seeking a profit was not required for a transfer of assets.

“We’re pleased with the court’s decision,” an iHeartMedia spokeswoman said in an email Wednesday.

iHeartMedia still faces daunting debt problems. Total company debt, as of June 30, stood at nearly $20.4 billion, the company said.

Much of iHeartMedia’s debt stems from 2008 when 70 percent of the company, then called Clear Channel Communications, was sold to two Boston-based private equity firms, Bain Capital Partners and Thomas H. Lee Partners. About 30 percent of the company remains publicly traded.

The company, which owns about 850 U.S. radio stations, has warned several times this year it might not be able to meet debt payments in 2018.