LBI Media files Chapter 11 plan based on agreement with lenders

By Caroline Salls

Pittsburgh, Nov. 26 – LBI Media, Inc. filed its pre-packaged plan of reorganization and related disclosure statement late on Nov. 21 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, LBI said it filed bankruptcy to implement an agreement with its senior lenders to reduce its debt by more than $350 million.

Under the restructuring agreement, HPS Investment Partners, LLC will exchange its first-lien notes for a majority equity interest in the reorganized company.

The proposed Chapter 11 plan also allows LBI to seek a superior restructuring proposal or to have its first-lien make-whole provision waived if the junior noteholders elect to refinance HPS’s claims.

The junior noteholder group may obtain up to 100% of the equity in the reorganized company to the extent it votes to accept the plan and is willing to satisfy HPS’s DIP facility and first-lien notes claims in full.

The plan and restructuring support agreement allow the LBI debtors to conduct a marketing process for up to 75 days after the bankruptcy filing date.

Holders of holding company unsecured notes and intermediate holding company unsecured notes will receive a share of cash unless they vote to reject the plan, in which case they will not receive any recovery. If an alternative plan transaction occurs, these creditors will receive a share of an alternative transaction recovery pool.

Holders of ASCAP/BMI settlement claims will receive a share of a settlement claim recovery pool if a reorganization transaction occurs or a share of the alternative transaction recovery pool if it does not.

Holders of ongoing trade claims will receive either a share of an ongoing trade claims recovery pool or the alternative transaction recovery pool.

Holders of general unsecured claims will receive either a share of a general unsecured claims recovery pool or the alternative transaction recovery pool.

Holders of existing LBI parent interests will receive no distribution.

Debtor-in-possession financing claims will either be converted into exit financing or paid in full in cash.

All administrative expense claims, priority tax claims, other secured claims and priority non-tax claims will be unimpaired by the plan.

The restructuring agreement sets May 20 as the deadline for effectiveness of the plan.

LBI Media is a Burbank, Calif., owner and operator of Spanish-language radio and television stations. The company filed bankruptcy on Nov. 21 under Chapter 11 case number 18-12655.

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