Spanish-language broadcaster LBI Media and its TV and radio stations have filed for chapter 11 bankruptcy protection.
LBI owns 27 Spanish-language radio and TV stations and the Estrella broadcast TV network.
LBI has agreed, along with its senior lenders, to reduce its $532.9 million in debt by $350 million. But in the meantime, while it is restructuring, LBI has also secured an additional $38 million to fund ongoing operations, the company said late Wednesday (Nov. 21).
LBI's primary lenders will get a majority stake in the reorganized company.
LBI says the requisite papers have been filed with the United States Bankruptcy Court for the District of Delaware to be able to continue to meet payroll and benefits "without interruption" and said it expects to get court approval.
LBI CFO Brian Kei told the bankruptcy court that the company was hit hard by the 2008 recession and that "despite LBI’s potential, due in large part to the Company’s overleveraged capital structure and significant interest expense, its financial performance has continued to suffer."
Actually a total of 17 LBI businesses/stations have filed for bankruptcy protection. They are Liberman Broadcasting, Inc.; LBI Media Holdings, Inc.; LBI Media Intermediate Holdings, Inc.; Empire Burbank Studios LLC; Liberman Broadcasting of California; LBI Radio License LLC; Liberman Broadcasting of Houston LLC; Liberman Broadcasting of Houston License LLC; Liberman Television of Houston LLC; KZJL License LLC; Liberman Television LLC; KRCA Television LLC; KRCA License LLC; Liberman Television of Dallas; Liberman Television of Dallas License LLC; Liberman Broadcasting of Dallas LLC; Liberman Broadcasting of Dallas License LLC.
"LBI will continue running its business in the ordinary course as a leading Spanish-language television and radio broadcaster and television network, allowing its popular programming to continue to be seen and heard by millions of viewers nationwide," the company said.
LBI also said it plans to pay its vendors and suppliers in full.
Weil, Gotshal & Manges LLP is legal counsel. Guggenheim Securities LLC is serving as investment banker, and Alvarez & Marsal North America is LBI's financial advisor.