Cumulus Clears Hurdle In Early Bankruptcy Stage.

Cumulus Media employees can breathe easy. The company has received bankruptcy court approval to continue paying talent, key vendors, and programming partners as it moves through Chapter 11, clearing the way for the company to maintain normal operations during its restructuring.

Bankruptcy Judge Alfredo Pérez has authorized Cumulus to pay its obligations tied to on-air talent, content programming, sales and marketing, and other trade creditors. The company is allowed to pay those bills as usual, but it doesn’t have to and can decide which ones to pay and when.

The filing also effectively outlines what it will cost to keep the company running during the bankruptcy process. Cumulus estimates up to $101.1 million in payments across several categories, led by $38.8 million for general trade obligations, $27.2 million for content programming and copyright costs, and $18.1 million tied to on-air talent. Smaller buckets include $13 million for sales and marketing and $4 million for station compensation.

The approval is a standard but critical step in large Chapter 11 cases, ensuring that employees, hosts, syndicators, music licensors and other vendors continue to be paid, reducing the risk of operational disruption.

“The prepackaged process is intended to address the company’s debt efficiently with no disruption to our operations, our people, and our strategies,” CEO Mary Berner said when the filing was made earlier this month.

At the same time, the court order builds in guardrails designed to preserve liquidity. Payments are subject to limits by category, and any overages require additional notice and potential court review. The company must also maintain detailed records of all payments and provide regular reporting to stakeholders.

Cumulus is also requiring that vendors continue to provide goods and services on customary terms to receive payment. If a vendor takes payment for old bills but then stops providing services, Cumulus can either demand the money back or count it toward what it owes them for current work instead.

Cumulus also secures flexibility to negotiate settlements with creditors for less than the full amount owed, a common tactic in restructuring cases aimed at reducing overall liabilities. But secured lenders retain oversight of how funds are deployed during the case.

Cumulus filed a Chapter 11 reorganization plan that will eliminate roughly $592 million of debt and reduce annual cash interest costs by about $49 million. Lenders have also agreed to provide up to $100 million to support operations during and after the restructuring process.

Judge Pérez has also approved two other Cumulus maneuvers that together aim to protect the company’s assets while ensuring its day-to-day financial operations continue uninterrupted during the reorganization.

In one order, the court approved a series of restrictions on trading in the company’s stock and bankruptcy claims, designed to preserve valuable tax attributes that could be used after the company exits restructuring. The order requires investors with significant ownership stakes — generally around 4.5% or more — to disclose their holdings and provide advance notice before buying or selling shares. Transactions that could jeopardize those tax benefits can be blocked, and any violations may be declared null and void.

The other court order allows Cumulus to continue operating its existing cash management system, a critical step in maintaining normal business operations. The approval ensures that routine financial activities including payroll and vendor payments can continue without disruption.