Interep trustee asks court to OK settlement with DIP lenders, agent

By Lisa Kerner

Charlotte, N.C., July 27 - Interep National Radio Sales, Inc. Chapter 7 trustee Kenneth P. Silverman filed a lawsuit Monday seeking approval of a settlement with the debtor-in-possession lenders Silver Point Capital, LP and Oaktree Capital Markets, LP and administrative agent Silver Point Finance LLC, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

A hearing is scheduled for Aug. 26.

The amount outstanding under the DIP loan is $1.3 million, the filing said.

Under the proposed settlement, the trustee will pay the DIP loan claim and the parties will exchange mutual general releases.

Also under the settlement:

• The pre-petition noteholders will waive their rights to receive any portion of the first $600,000 distributed by the trustee on account of allowed pre-petition general unsecured claims;

• After other allowed general unsecured creditors receive their pro rata share of the first $600,000 distribution all general unsecured claims, including that of the prepetition noteholders, shall receive pro rata distributions in accordance with the provisions of the Bankruptcy Code and further order of the court; and

• The prepetition noteholders will pay the $150,000 severance claim of William McEntee, subject to the court's approval of the trustee's settlement with McEntee.

Interep, a New York-based radio advertising and marketing company, filed for bankruptcy on March 30, 2008. Its Chapter 11 case number is 08-11079.

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