Most corporate loan agreements have language requiring permission before corporate assets are transferred or the pecking order of who gets paid first is changed. IHeart (aka Clear Channel) tried to pull a fast one segregating assets away from the lenders.
Lenders are not amused and were prepared to deliver a notice of default which would throw iHeart into restructuring and/or bankruptcy. The company and its finances are very complex. Today people in high places will be trying to negotiate a compromise.
Bob Pittman was the genius behind the AOL takeover of Time Warner, which was an unmitigated disaster. A default would ripple widely. I believe the original “take private” transaction in 2008 may have been a major trigger in the panic of September 2008.
>Bob Pittman was the genius behind the AOL takeover of Time Warner, which was an unmitigated disaster.
It was great for AOL and their shareholders and insulated them from the 2000 tech crash. For Time Warner, not so good being bought with all that AOL stock that was really worth pennies on the dollar at the time AOL acquired Time Warner.
Conclusion – Bob Pittman really was a genius…. or perhaps very lucky.
http://www.washingtonpost.com/wp-dyn/articles/A53801-2005Mar21.html
“AOL agreed… that it had improperly tamped down expenses for acquiring new subscribers by capitalizing them over time.”
Damn! I wonder if they are still capitalizing the costs for producing and mailing out all those CDs with their software, and for the 3 1/2″ diskettes before them. They were not the most environmentally friendly items and from such a liberal company such as Time / CNN. 😉
Actually, I think it was 5 1/4 floppy discs 🙂