Interep’s trustee Kenneth Silverman filed Wednesday (Nov. 12) to allow Interep’s sole competitor, Katz Media to negotiate with Interep’s clients and employees in exchange for a flat fee of $3.6 million cash.
Although not an outright sale, the proposal, which is now scheduled to come before the U. S. Bankruptcy Court for the Southern District of New York on Nov. 25, clears the way for the Clear Channel-owned Katz to sign Interep’s clients and solidify its position as the largest and possibly only national radio rep firm.
In the interim, Interep will continue to serve its clients until a final decision is reached by the court.
The proposal leaves open the option for Interep’s clients, which include CBS Radio (about one-third of Interep’s revenue), to seek representation elsewhere. Other potential suitors could also prsent alternative proposals to Silverman.
This latest development may be the final chapter in Interep’s history, which filed Oct. 24 to convert its bankruptcy Chapter 11 status to Chapter 7 liquidation in order to pay off the company’s debtors. Under financial pressure for the past three years, Interep lost a number of representation contracts with major radio groups such as Radio One, Cumulus and Citadel, leaving it about 1,600 stations.
“The proposed agreement would allow the debtors’ current clients to transition to their business to a more stable long-term service provider, like Katz, without fear of liability to, or the need for litigation with, the Debtor’s estates,” the filing said.
According to the filing, Silverman approached Katz to determine if Katz had any interest in acquiring certain Interep operations or assets, which led to the agreement revealed in today’s filing.