Houston, TX – Audacy, one of the largest radio owners, is reportedly preparing to file for bankruptcy protection, as it struggles to pay back its $2 billion debt. The Wall Street Journal highlighted the radio broadcaster’s ongoing financial losses, with a reported loss of $281.7 million in the third quarter of 2023. This potential bankruptcy filing follows a 2017 merger with CBS Radio, which burdened Audacy with $1.5 billion in debt.
In California, the Franciscan Friars have filed for Chapter 11 bankruptcy after facing nearly 100 sexual-abuse lawsuits. These lawsuits, mostly filed within the past two years, have generated substantial litigation costs. The Franciscan Friars estimate their assets to be worth $10 million and anticipate litigation costs of around $50 million.
Former bankruptcy judge David Jones from Houston is now facing a lawsuit after his romantic relationship with a bankruptcy attorney led to his resignation. Jones is arguing that he cannot be personally sued over his rulings as a judge and is seeking to have the lawsuit dismissed. His resignation has caused significant disruption in the corporate bankruptcy world, with over 3,500 cases being reassigned.
Across the United States, bankruptcy filings have surged by 18% in 2023. Factors contributing to this increase include higher interest rates, stricter lending standards, and the expiration of COVID-19-related financial support. Despite the rising number of bankruptcies, insolvency case volumes remain below pre-pandemic levels. Experts predict that bankruptcy filings will continue to climb in 2024.
The rise in bankruptcy cases has raised questions about the ability of the bankruptcy bar to efficiently resolve these disputes. Many of these cases have been logjams, taking an average of three years to reach a resolution. Advocates are calling for faster resolutions, particularly for aging survivors who are waiting for recoveries.
As experts look ahead to 2024, they anticipate a busy year for restructuring professionals. While rising interest rates and tighter lending standards may pose challenges, there is still significant liquidity in the market, particularly in the private credit space. However, businesses with fundamental issues that cannot be solved by available liquidity are expected to restructure in the coming year. As the economy navigates through potential crises, the hope is for a soft landing and a year of meaningful restructuring.