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Judge Approves Young’s Reorganization Plan

NEW YORK: Young Broadcasting can officially proceed with reorganization. A U.S. Bankruptcy Court for the Southern District of New York gave Young the go-ahead to implement a plan put forth by senior lenders. Arthur J. Gonzalez, chief bankruptcy judge for the court, rejected an alternate proposal from unsecured creditors on the grounds that it wasn’t feasible.

The approved plan creates a new company, the New Young Broadcasting Holding Co., or NewCo, into which all the common stock will be placed. It also provides that secured lenders receive equity interests commensurate with their claims totaling $338 million. Unsecured creditors will receive a pro rate share of $1 million. The new company will emerge debt free.

The alternate plan would have reinstated the $338 million in debt for maturity in November 2012, provided noteholders 10 percent pro rata of common stock, the opportunity to buy preferred stock, and a $45.6 million infusion. The court determined the plan’s growth assumptions were “aggressive compared to those of their public peers during 2008 through 2010,” and therefore unlikely to succeed.

Young recently reported 2009 and 4Q09 revenues that were both down versus comparable previous, but posted operating income for both compared to losses the year before.

Young Broadcasting has 10 TV stations, including KRON-TV in San Francisco, the station that sent it into Chapter 11. Young bought the station in 1999 for $823 million--the most ever paid for a TV station. An NBC affiliate at the time, the network soon pulled its programming and bought its own station in the market, leaving KRON with “severe cash-flow losses,” the court said. Attempts to sell the station were unsuccessful. -- Deborah D. McAdams

April 15, 2010: “Young 2009 Revenues Drop 16 Percent
Young posted revenues of $159.7 million for the year, down 16 percent form 2008. Revenues for 4Q09 were down 10 percent to $46.8 million.

July 22, 2009: “Gray Tapped to Run Reorganized Young Stations
Gray Television will run the 10 TV stations that went to senior lenders in the Young Broadcasting bankruptcy, pending court approval. 

July 15, 2009: “Lenders to Take Over Young TV Stations
Senior lenders will take over the 10 TV stations in the Young Broadcasting bankruptcy, 

July 14, 2009: “Young Broadcasting Auction Cancelled
“The Debtors, pursuant to the terms of the Bidding Procedures Order, have determined that the Auction is not necessary and hereby provide notice that the Auction is cancelled.”

July 2, 2009: “Young Broadcasting Auction Date Set
The assets of Young Broadcasting will be put on auction July 14 in New York. 

March 4, 2009: “Young Files for Chapter 11
“It is important to note that we are restructuring our debt, not our operations,” said Vincent Young, YBTVA chairman.