Jerry Del Colliano’s newsletter today says Cumulus has retained a bankruptcy law firm. That makes a lot of sense. Due to non-proportional voting rights, the Dickeys with only 5% of the stock can outvote the owner who owns 24% of the stock. I think this needs to be changed by Congress.
So the only way past this is to force the Dickeys to give up control. The lenders on the $2.2 billion in debt can cause that to happen. The threat of bankruptcy may be enough to convince the Dickeys to leave – if the company goes through bankruptcy, their 5% likely becomes worth $0.00 – better to own 5% of a company you don’t control than own 0% of a company you don’t control.
In the spirit of full disclosure, I bought 3000 shares of CMLS about two weeks ago. Maybe I can attend the bankruptcy hearings 😉