“American Idol” Producer Core Entertainment Sheds Debt in Bankruptcy

by San Antonio Attorney

American Idol producer Core Entertainment successfully eliminated debt worth hundreds of millions of dollars with the approval of a court.  Also, the producer would be allowed to work with franchise creator Simon Fuller after leaving bankruptcy.

The television producer received a court confirmation on its plan that consists of a resolution with a committee of creditors as well as the deletion of equity held by 21st Century Fox, Inc.  and Apollo Global Management LLC, as stated on court documents.

Even in bankruptcy, Core Entertainment managed to produce various television shows such as “So You Think You Can Dance”.

The plan was approved by Bankruptcy Judge Stuart Bernstein in the court of Manhattan, after considering that majority of creditors supported the plan, and all objections in writing had been settled ahead of the hearing.

The bankruptcy plan eliminated about $385 million in liabilities of Core Entertainment and includes a deal from its major lenders, Crestview Media Investors LP and Tennenbaum Capital Partners LLC, to invest an estimated $18 million by means of rights offering, according to court papers filed by the company.  The overall terms of the agreement had already been authorized last month, guaranteeing equity to senior lenders in the reorganized company.  They are set to recuperate roughly 47% of the original debt, while the lesser priority creditors are set to receive roughly 2%.

Core Entertainment, producer of a very popular TV program in America, sought for bankruptcy protection in April along with around 50 affiliates.

Fuller, the creator of the “American Idol” franchise and “So You Think You Can Dance”, opposed the reorganization plan, because it was unfair to unsecured creditors like him.  He filed over $10 million in claims related to a share of profit, and stated in court papers he wanted to probe on a loan from 19 Entertainment, which was incurred before the bankruptcy case was filed.

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