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Cumulus Media Objection Filed

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Securities & Exchange Commission, a statutory party to these proceedings’ and the federal agency responsible for regulating and enforcing compliance with the federal securities laws, filed with the U.S. Bankruptcy Court an objection to Cumulus Media’s Disclosure Statement for the Joint Plan of Reorganization.

The SEC asserts, “The Commission objects to the non-debtor third party releases contained in the Plan on two grounds. First, non-debtor third party releases contravene Section 524(e) of the Bankruptcy Code, which provides that only the debts of the debtor are affected by the Chapter 11 discharge provisions. Such releases have special significance for public investors because they may enable non-debtors to benefit from a debtor’s bankruptcy by obtaining their own releases with respect to past misconduct, including violations of the federal securities laws or breaches of fiduciary duty under state law. While such releases may be allowed in exceptional circumstances, those circumstances are not present here. Second, to the extent that the third party releases purport to release direct claims between non-debtor parties, the releases have no impact on the assets or administration of the Debtors’ estates and the Court therefore lacks subject matter jurisdiction to approve them. Thus, the Disclosure Statement should not be approved unless it is amended to include legal and factual support for the non-debtor third party releases or to reflect the deletion or modification of the releases. The releases should be deleted from the Plan, or, alternatively, the Plan should be amended to state that the releases will not bind: (i) shareholders who are deemed to reject the Plan; and (ii) unsecured creditors who abstain from voting.”

For more on the Cumulus Media bankruptcy go to BankruptcyData.

The post Cumulus Media Objection Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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