Freedom Communications entitled to $1.5 million via Silver Point deal

By Caroline Salls

Pittsburgh, March 14 – Freedom Communications, Inc.’s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the Central District of California to approve a settlement reached by the company, the committee and debtor-in-possession and pre-bankruptcy lender agent Silver Point Finance, LLC, according to a motion filed Monday.

The committee said the settlement resolves disputes regarding stipulations and admissions made by Freedom under its final DIP financing order in connection with pre-bankruptcy debt and pre-bankruptcy senior liens.

Under the settlement, the Freedom estates will be entitled to $1.5 million of the cash proceeds from the sale of substantially all of its assets that would otherwise be recoverable by the DIP financing agent and lenders on account of their DIP loan claims. The $1.5 million will be held in trust by the committee’s counsel.

In addition, a first-priority secured claim held by the DIP agent will be equal to the amount of DIP financing obligations, minus $2.5 million.

Immediately upon receipt of any sale proceeds, the company must direct those proceeds to the committee’s counsel until the cash consideration has been set aside in full, and then to the DIP agent until the DIP payment amount has been paid in full.

The committee requested a March 21 hearing.

Freedom Communications, a Santa Ana, Calif.-based newspaper company, filed for bankruptcy on Nov. 1. The Chapter 11 case number is 15-15311.

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