Cumulus Clears Key Hurdle, Locks In Lender Backing.

Cumulus Media has won bankruptcy court approval to continue using cash collateral, formalizing the financial framework that will allow it to operate through Chapter 11 while protecting its lenders.

Bankruptcy Judge Alfredo Pérez on Wednesday authorized the company to use existing lender cash while granting those creditors additional safeguards, including new liens on virtually all company assets and priority claims on repayment. The protections reinforce lenders’ position as Cumulus restructures its balance sheet as part of a Chapter 11 process begun earlier this month.

Court documents detail the company’s prepetition debt structure, including a revolving credit facility of up to $125 million and roughly $55 million outstanding at the time of the bankruptcy filing, along with additional obligations tied to letters of credit and accrued costs.

As part of the deal, Cumulus agreed to recognize what it owes its lenders and their right to be paid first, limiting its ability to dispute those claims later. In return, lenders are allowing the company to keep using their cash to run the business. The agreement also gives lenders added protection during the bankruptcy, ensuring they stay first in line for repayment and extending their claims over both current and future company assets.

During the hearing, Bankruptcy Judge Alfredo Pérez rejected a request by one debtholder to extend the amount of time objections to the restructuring can be raised.

“There isn’t anything in this order that is unusual — this is a case which has been funded by the lenders,” Pérez said, adding that the financing and budget “seem to be perfectly appropriate and a sound exercise of the debtor’s business judgment.” Pérez also underscored the importance of the financing, noting the company “needed the cash collateral to operate” as he approved the order.

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.

The case is moving on an accelerated timeline. Court filings indicate Cumulus is targeting confirmation within roughly 10 weeks of its early March filing, with approval expected as soon as early May.

The structure reflects a prepackaged restructuring with broad lender support and limited expected friction. No motion has been filed to appoint a creditors’ committee, and the court noted that while lender stipulations are in place, they remain subject to challenge. “All of the various stipulations are subject to challenge. There’s nothing cast in stone,” Pérez said.

In the meantime, Cumulus’ attorney, Jacob Adlerstein of Paul Weiss, told the court the case is progressing as planned.

“The company has transitioned into Chapter 11 smoothly over the past several weeks,” he told the judge. Adlerstein said Cumulus is continuing to work closely with an ad hoc group representing more than 80% of its secured debt. Since the bankruptcy filing, he said support for the restructuring agreement has grown to about 83% of secured creditors.

The court last week gave Cumulus permission 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. 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.