11.16.2009 05:00 PM
ION Creditor Takeover Rejected
NEW YORK: A federal judge rejected a $250 million offer
from a creditor of bankrupt ION Media to takeover the company, reports
indicate. Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York rejected the offer from Cyrus Capital Partners last week.
Cyrus claimed ION’s reorganization plan was based on invalid liens against its
broadcast licenses, according to Reuters.
During a hearing on the matter last Thursday, the judge said he would approve
ION’s reorganization plan, which eliminates more than $2.7 billion in debt and
converts its $150 million in debtor-in-possession financing into equity.
ION filed for Chapter 11 in May. It’s expected to emerge shortly after the
court issues its written confirmation of the reorganization plan, which had the
support of first-lien debt holders.
Cyrus Capital Partners made an offer last Monday to refinance ION’s DIP funding
at $250 in return for a 62.6 percent stake in the reorganized company. ION’s
board rejected the offer, fearing it would delay the company’s emergence from
bankruptcy. Reuters said Cyrus has
been in litigation with ION over its reorg plan because it’s based primarily on
the value of the FCC spectrum licenses, which cannot be used as collateral for
The judge said the licenses represented “purported capital” and determined that
Cyrus didn’t have grounds to oppose the plan. His formal written approval of
ION’s reorg is expected within a week or so.
More on ION:
6, 2009: “Court Approves ION’s
The disclosure statement proffered by ION Media Networks on its proposed
reorganization has received the court’s blessing.
July 6, 2009: “Court
Approves DIP Financing for ION Media”
ION Media said it received final approval for its $150 million
debtor-in-possession financing plan.
July 2, 2009: “ION Media’s Creditors
Object to DIP Terms”
ION Media’s creditors are objecting to the terms of the company’s $150 million
May 21, 2009: “ION Files for
ION Media Networks has filed for Chapter 11 in U.S. Bankruptcy Court for the
Southern District of New York, listing assets of around $10 million and
liabilities of more than $1 billion.
June 29, 2009: “ION Mobilizes TV in
Manhattan and D.C.”
The service marks the for-real commercial debut of mobile digital TV
broadcasting in the United States, though for whom is unclear.