SBS Locks In Overwhelming Creditor Support For Bankruptcy Plan.

Spanish Broadcasting System says its Chapter 11 filing is designed to be a fast-moving, largely pre-negotiated restructuring. Court filings show just how deeply the company’s lenders are already embedded in the process — and how aggressively SBS is trying to stabilize operations while cutting its debt load by more than three-quarters.

Newly appointed Chief Restructuring Officer Jesse York says the bankruptcy is intended to implement a “consensual, comprehensive deleveraging transaction” that will allow SBS to continue operating normally while dramatically reshaping its balance sheet.

The restructuring will slash its debt from roughly $310 million to about $70 million. York says in a declaration filed with the U.S. Bankruptcy Court in Delaware that the “significant deleveraging” will allow SBS management to focus on long-term growth initiatives without “the overhang of an unsustainable capital structure” and “overly burdensome” debt service requirements.

Support for the restructuring has grown substantially since SBS first unveiled its restructuring plans in early-April. More than 90% of debtholders now support the deal. And SBS says it already has the votes needed to confirm its reorganization plan and expects to move through the process quickly.

“We have strong alignment with our key stakeholders and a clear path to emerge with a significantly strengthened capital structure,” CEO Raúl Alarcón said in a statement. The company says listeners, advertisers and vendors won’t see major disruptions, with vendors expected to be paid in full.

SBS has already asked the court for authority to continue honoring advertising-related obligations during bankruptcy. The company says roughly $1.2 million in ad obligations are expected to come due during the first three weeks of the case, mainly tied to volume discounts. The company says failure to continue those programs could risk advertiser losses at a critical time.

Court filings also offer a glimpse into management’s expectations for the business after bankruptcy. Internal projections forecast 2026 net revenue between roughly $118.4 million and $122.5 million, with earnings projected in a range of $18 million to $22.8 million. The forecasts suggest the company expects to be profitable during the restructuring process.

York — a Senior Managing Director at Riveron, a consulting firm that has been advising SBS — traces the Chapter 11 to a mix of structural industry pressure, weaker political advertising and market-specific disruption, like the Los Angeles wildfires that disrupted ad spending in the market last year. These issues were in addition to a mounting debt that the company could not refinance or repay. The goal of the bankruptcy is to eliminate that financial overhang and allow management to refocus on growth initiatives rather than balance sheet pressures.

‘Sales Pivot’ Potential

Under the restructuring plan, SBS’s existing capital structure will be almost entirely reset. The plan will wipe out its existing common equity, preferred shares and senior secured notes, handing lenders 100% ownership of the reorganized company.

While ownership will shift to creditors, much of SBS’s leadership is expected to remain in place. Alarcón will continue as CEO and Chairman during the restructuring, while General Counsel Richard Lara has been elevated to Chief Operating Officer. The filings also show management compensation will shift heavily toward equity incentives. The reorganized company will reserve up to 10% of equity for a new management incentive plan, aligning executives with the post-bankruptcy company’s performance. Lara’s new employment agreement also includes a potential $750,000 bonus tied to completion of the restructuring or a sale and securing regulatory approvals.

SBS’s restructuring includes an unusual built-in “sale pivot” mechanism that allows creditors to shift the company from a traditional Chapter 11 reorganization into a potential sale process if a better recovery opportunity emerges. The structure effectively lets lenders evaluate two paths simultaneously — a deleveraged standalone SBS or a broader strategic transaction completed through the bankruptcy process.

No buyer appears on deck, however, and the filings suggest the current expectation remains emergence as an operating company. “This restructuring represents an important step forward in strengthening our balance sheet and positioning the company for the future,” Alarcón said.