Citadel Broadcasting seeks court ruling in dispute over default notice from holders of 1.875% notes

By Jennifer Chiou

New York, July 17 - Citadel Broadcasting Corp. filed a complaint against certain holders of its $330 million of 1.875% convertible subordinated notes due 2011 in the Supreme Court for the State of New York, according to an 8-K filing with the Securities and Exchange Commission.

The Las Vegas radio broadcaster is seeking a judgment declaring that a proposed merger agreement does not represent a fundamental change under the note indenture.

As previously reported, on Feb. 27 and April 28, the company received notices of default and acceleration from holders of more than $109 million of the notes.

Noteholders alleged that proposed transactions and agreements under a Feb. 6 merger agreement between Citadel, The Walt Disney Co., ABC Chicago FM Radio, Inc. and Alphabet Acquisition Corp. constitute a fundamental change under the indenture.

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