Equity Media subsidiaries ask court to name them DIP loan borrowers

By Caroline Salls

Pittsburgh, Feb. 20 - Equity Media Holdings Corp. debtor subsidiaries Denver Broadcasting, Inc., EBC Waterloo, Inc. and Arkansas 49, Inc. asked the U.S. Bankruptcy Court for the Eastern District of Arkansas to allow them to become borrowers under the company's $55 million debtor-in-possession facility, according to a Thursday court filing.

According to the motion, under the proposed DIP loan agreement, Equity Media and administrative agent Silver Point Finance, LLC agreed that none of the liens or security interests granted in connection with the DIP financing would prime any liens or security interests on the assets of any of the debtors existing as of the bankruptcy filing date and held by any other secured creditor.

As a result, however, Denver Broadcasting, EBC and Arkansas 49 said some of the company's debtor subsidiaries were not listed as borrowers under the DIP agreement, and the borrowers were prohibited from transferring proceeds of the DIP loans or other cash collateral or to provide goods and services to the restricted subsidiaries.

Equity Media, based in Little Rock, Ark., owns and operates television stations. The company filed for bankruptcy on Dec. 8, and its Chapter 11 case number is 08-17646.

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