Spanish Broadcasting System (SBS) has won court approval for its Chapter 11 reorganization plan, positioning the Hispanic media company to exit bankruptcy once federal regulators approve the transfer of its broadcast licenses.
U.S. Bankruptcy Judge Brendan Shannon signed the confirmation order on July 1 in Delaware. The prepackaged plan, filed in May, will slash SBS’s debt by more than 75% — eliminating roughly $240 million of its $310 million total — by transferring ownership to its creditors.
The company must now obtain FCC approval for the change in control of its radio and TV licenses, a process that could take several weeks or months.
SBS filed the Chapter 11 case after reaching an agreement with creditors. At the time, CEO Raúl Alarcón said the restructuring would strengthen the company’s balance sheet and better position it for the future. All publicly traded shares will be consolidated and transferred to debtholders.
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Court filings listed assets and liabilities each between $100 million and $500 million. Creditors included American Tower, BMI, Carl T. Jones Corp., Nielsen, and Dielectric. The Internal Revenue Service and SoundExchange initially objected to the plan — the IRS over a $1.28 million unsecured claim and SoundExchange over $1.37 million in royalties — but both objections were withdrawn in late June. SBS pledged to pay SoundExchange in full.