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Court Stays ION’s Exit From Chapter 11

NEW YORK: A federal court today stayed a ruling by a lower bankruptcy court to approve ION Media’s reorganization plan. The news of the stay was released by Cyrus Capital Partners, a creditor in the case that filed an objection with the U.S. Bankruptcy Court for the Southern District of New York over ION’s plan.

Cyrus said ION’s reoganization was improperly based on liens against the company’s broadcast licenses. That court rejected a $250 million takeover offer from Cyrus in November and approved ION’s plan, which eliminated $2.7 billion in debt and turned $150 million in debtor-in-possession financing into equity.

ION was expected to emerge from bankruptcy today. Cyrus said it expected to receive a court date in January to hear its appeal.

ION Media, which owns and operates the ION TV network and stations, filed for Chapter 11 in May just as it reached an agreement with first-lien creditors for the DIP financing.

More on ION:
November 16, 2009:ION Creditor Takeover Rejected
A federal judge rejected a $250 million offer from a creditor of bankrupt ION Media to takeover the company.

October 6, 2009: “Court Approves ION’s Disclosure Statement”
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 debtor-in-possession loan.

May 21, 2009: “ION Files for Bankruptcy
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.