According to The Wall Street Journal, the ad hoc group of term loan and priority guarantee note holders and iHM’s unsecured creditors committee have been fighting the company on hiring both Moelis and LionTree for months, arguing that two advisers aren’t needed and that their fees are too high.
Under the settlement reached between the radio-station operator and the creditor groups, the two firms capped their total fees at $67.5 million, with at least $10 million going to LionTree and $57.5 million going to Moelis, according to court filings.
The company argued that LionTree was hired for its expertise in the media, telecommunication and technology sectors and its experience on high-profile deals in the music industry, according to court filings. Moelis has been working with iHeart since 2015, when it was hired to work on refinancing debt that was coming due within a few years, and continued to work for the company on a broad restructuring of close to $16 billion in debt since then.
The company originally hired LionTree in the fall of 2017, and LionTree worked on bringing Liberty Media Corp. to the table with a deal to invest $1.16 billion in the company. Liberty Media has since withdrawn its offer, but the deal could be revived before the company exits bankruptcy, The Wall Street Journal previously reported.
iHM filed for bankruptcy in March with a plan to slash $10 billion of its total $16 billion in debt at the company’s broadcast radio division. Under the plan, holders of $13 billion in priority guarantee notes and term loans are slated to receive a 94% stake in the company’s radio broadcast company, and all of the equity in the Clear Channel Outdoor Holdings billboard subsidiary. iHeart owns an 89.5% stake in Clear Channel Outdoor, which didn’t file for bankruptcy.
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