--Bankruptcy judge sets February hearing to confirm Peak
Broadcasting Chapter 11 plan
--The judge, over the objections filed by lender Rabobank
International, approves Peak's first-day motions
--Among Rabobank's objections is that the Peak case is moving
too quickly
(Adds information from outcome of hearing.)
By Stephanie Gleason
Of DOW JONES DAILY BANKRUPTCY REVIEW
A bankruptcy judge set a hearing for Feb. 23 to confirm Peak
Broadcasting LLC's Chapter 11 plan and approved all of the
company's first-day motions Thursday, over the objections filed by
Rabobank International, the only lender to vote against Peak's
prepackaged plan.
The approval by Judge Peter Walsh of the U.S. Bankruptcy Court
in Wilmington, Del., sets the stage for Peak Broadcasting to meet
its goal of having the plan approved within 50 days and move
quickly through the bankruptcy process, despite Rabobank's
objections that the case is moving too quickly.
"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 revenue 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.
In its Chapter 11 petition, Peak Broadcasting had claimed
between $50 million and $100 million in both assets and liabilities
but didn't provide more specific financial information.
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