By Stephanie Gleason
Of DOW JONES DAILY BANKRUPTCY REVIEW
Rabobank International, the only lender to vote against Peak
Broadcasting LLC's prepackaged Chapter 11 plan, is attempting put
the brakes on the company's accelerated bankruptcy case and is
seeking to derail Peak Broadcasting's bid to skip certain financial
disclosures.
In documents filed Wednesday with the U.S. Bankruptcy Court in
Wilmington, Del., Rabobank objected to Peak Broadcasting's request
that the deadline for filing a statement of financial affairs be
extended to March 10 and that the disclosure be waived altogether
if the case concludes before that date.
"The debtors cannot attempt to speed up the bankruptcy process
while claiming not to have enough resources to fulfill their basic
obligation to file the schedules and statements," Robobank said.
"The creditors and other parties in interest deserve an opportunity
to analyze the debtors' schedules and statements."
The Bankruptcy Code sets a two-week deadline for filing a
statement of financial affairs, which contains specific information
about revenues and other assets, but that can be automatically
extended to 30 days in Delaware. Peak Broadcasting is requesting
two months while also asking for its Chapter 11 plan to be
confirmed within 50 days. In its Chapter 11 petition, Peak
Broadcasting claimed between $50 million and $100 million in both
assets and liabilities but didn't provide more specific financial
information.
More generally, Rabobank is objecting to Peak Broadcasting's
Chapter 11 plan and the speed with which the company is attempting
to move through the bankruptcy process.
"Pre-packaged plans offer a means of expediting the bankruptcy
process by doing most of the work in advance of the filing. That
efficiency, however, must not be obtained at the price of
diminishing the integrity of the process," Rabobank said in court
documents.
Peak Broadcasting had said that lenders could pull their support
of the plan if it isn't confirmed in 50 days, but Rabobank called
that deadline "illusory and self-imposed."
The plan proposes "gifts" to junior creditors, lacks
justification for retaining the same management employees in the
reorganized company and treats Rabobank differently than other
claimants, Rabobank said.
Peak Broadcasting began negotiating with lenders in October
after falling advertising revenues threatened its ability to
continue making payments on debt. All lenders except Rabobank
agreed in December to the plan, which pays senior lenders owed
$58.2 million with equity in the new company and restructured
loans.
The Fresno, Calif., company was formed in 2006 when it purchased
seven Fresno radio stations from CBS Corp. (CBS). In April 2007,
the company expanded into Idaho with the acquisition of six radio
stations and sold two stations in Fresno. The stations, a
combination of AM and FM, broadcast programming from news and talk
to country and oldies.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection.)
-By Stephanie Gleason, Dow Jones Daily Bankruptcy Review;
202-862-1347; stephanie.gleason@dowjones.com