After winning a fierce legal battle to gain the rights to historic urban program, Showtime at the Apollo, The Heritage Networks is fighting a battle against bankruptcy.
On Friday, urban program syndicator and ad sales company Heritage filed a reorganization plan with the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division. That plan includes pre-negotiated arrangements with Heritage's major creditors to pay back debts.
At a hearing next week, Heritage expects the court to approve the package and then issue a confirmation plan within 90 days. If that happens, Heritage can emerge from Chapter 11 bankruptcy quickly and also set up new financing. Willow Sanchez, Heritage's general counsel, said that such financing has already been arranged, but wouldn't disclose the lender until after next week's hearing.
As part of the company's restructuring, founder Frank Mercado Valdes has stepped aside, turning over day-to-day management of the company to Charles Walker, formerly a restructuring banker with Lehman Bros. in New York City. Mercado Valdes will remain a major shareholder and consultant to The Heritage Networks.
Sanchez says taking on the production and distribution of three original programs —Showtime at the Apollo, Livin' Large and Weekend Vibe— overextended the company, forcing it to restructure. She doesn't expect any of the programs to go off the air as a result of the proceeding.
Heritage also sells movie packages to TV stations advertising in several off-net urban shows, such as Moesha,Girlfriends and The Parkers.