Young Broadcasting sale procedures approved; auction set for June 22

By Rebecca Melvin

New York, April 2 - Young Broadcasting Inc. obtained court approval Thursday of its bid procedures in connection with an investment or sale transaction, and an auction was set for June 22, with a court approval hearing date set for June 25, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

Under the approved motion, Young Broadcasting is also authorized to enter into a stalking horse agreement in connection with a transaction, and a termination fee of no more than 3%, plus up to $300,000 of expenses.

Under the bid procedures, Young Broadcasting has to receive stalking horse bids by April 8 and select one by April 22.

At auction, bids made after the initial opening bid have to be higher by minimum increments of at least $1 million.

The official committee of unsecured creditors had objected to the motion, claiming in a court filing that the process was "dictated" by the company's prepetition secured lenders, and that the company consented to the arrangement in exchange for the consensual use of cash collateral.

The process makes "little sense from an economic or practical perspective," the committee stated in its filing, alleging that the company's secured prepetition lenders intend to use the bidding as a false market test to justify saying there is no value beyond their secured claims.

Neither committee counsel nor company counsel returned phone calls from Prospect News by press time.

As previously reported, Young said it believes it to be in the best interests of its estates and creditors to pursue a dual-track process that concurrently solicits bids for either a potential refinancing or equity investment in its plan or the sale, as a going concern, of all or a part of its businesses and/or assets.

New York-based Young Broadcasting owns 10 television stations and the national representation firm Adam Young Inc. The company filed for bankruptcy on Feb. 13. Its Chapter 11 case number is 09-10645.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.