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iHeartMedia Objection Filed, Seal Sought

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The Term Loan/PGN Group, a creditor, filed with the U.S. Bankruptcy Court a combined objection to two of iHeartMedia’s investment banker retention applications – one seeking to employ and retain Moelis and Company and another seeking to retain and employ Liontree Investments.

In support of this motion, the Term Loan/PGN Group states, “The Term Loan/PGN Group includes the largest senior creditors of the Debtor’s estates and has strong interest in ensuring that professional fee paid out of the estates are necessary and reasonable because holders of senior claims will bear the vast majority of the cost of professionals in the cases…the Debtors seek to pay what would amount to over $80 million in total investment banking fees to Moelis and LionTree notwithstanding that on the date of the chapter 11 filing holders of over $12 billion of the Debtors $16 billion in outstanding funded debt had already committed to support a plan under a restructuring support agreement (the ‘RSA’), the framework for which the Term Loan/PGN Group had proposed. Given the relatively modest amount of investment banking services that will be necessary if the proposed and already broadly supported plan embodied in the RSA is confirmed and consummated, the Debtors have not and cannot meet their burden to prove that the terms proposed in the Moelis and LionTree Applications are necessary or reasonable. The Moelis Application requests authority to pay Moelis aggregate fees that could exceed $65 million allegedly for chapter 11 restructuring services.…The LionTree Application requests authority to pay LionTree a percentage of any equity transaction, regardless of whether LionTree played any significant role in identifying or consummating such a transaction. This significant fee to LionTree would be on top of the similar Capital Transaction Fee owed to Moelis following any equity transaction. The services to be performed by LionTree appear to be completely duplicative of services Moelis will provide. Even if that were not the case, the equity transaction fee sought for LionTree is not reasonable….Given the relatively modest amount of work that remains to be done post-Petition, the Debtors should conduct a competitive process to obtain advisors that can provide the limited services that must be performed going forward with reasonable and competitive compensation.” Creditor, the Term Loan/PGN Group also filed with the Court a motion to seal its unredacted combine objection, which notes, “The Debtors and Moelis have designated the prior Moelis engagement letters as ‘confidential’ pursuant to a draft protective order that has been circulated among the parties. Accordingly, the Term Loan/PGN Group has redacted all portions of the Objection that reflect terms contained in those prior engagement letters, including redacting Exhibit A entirely.”

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The post iHeartMedia Objection Filed, Seal Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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