NEW YORK (Reuters) - iHeartMedia Inc, the largest owner of U.S. radio stations, on Wednesday secured a temporary restraining order from a state court in Texas rescinding notices of default it received from a small number of its senior creditors.
The San Antonio, Texas-based company has been battling with creditors, a group made up mostly of hedge funds, after it moved Clear Channel Outdoor Holdings Inc shares to another subsidiary, Broader Media LLC.
iHeart this week received a default notice from the creditors, arguing the transfer is technically a default, and saying they could call their debt due in 60 days - a sum more than $6 billion - according to a lawsuit iHeart filed in State District Court in Bexar County, Texas.
The lawsuit also claims that the creditors’ actions threaten to force the company into bankruptcy.
The restraining order iHeart won expires in 14 days, but the court may extend it, according to a public filing from the company. The order also stops the creditors from issuing additional notices of default.
iHeart said in a prepared statement that it was pleased with the outcome and looks forward to a favorable ruling.
The share move could be used to help the company, struggling with a $21 billion debt load, to find other financing opportunities, Moody’s Investors Service said in a research note.
Reporting by Jessica DiNapoli