IHeartMedia Inc. said it received an order from a Texas court temporarily blocking its bondholders from stating in court that the radio broadcaster defaulted on its debt by transferring $500 million of assets to one of its subsidiaries.
The company, which was formerly known as Clear Channel Communications Inc., said in a regulatory filing Wednesday that the State District Court in Bexar County, Texas, issued a temporary restraining order rescinding notices of default that were sent by its creditors. In addition, the court blocked the lenders from filing additional default notices based on the move.
“We believe the contribution constituted a permitted investment under, and fully complied with, our financing agreements,” IHeart said in an e-mailed statement. “We are pleased with the outcome of today’s hearing.”
As a condition, IHeart said it agreed not to sell or transfer any shares of its Clear Channel Outdoor Holdings Inc. subsidiary until a hearing is held.
IHeart’s lenders are claiming that the company, which is weighed down by more than $20 billion of borrowings, violated debt covenants by transferring shares of Clear Channel Outdoor to its Broader Media LLC unit last year. The creditors represent at least 25 percent of the outstanding principal of four of the company’s priority guarantee notes.