Citadel Broadcasting Corp. Fortress Breached by Bankruptcy

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Citadel Broadcasting Corp., the nation's third largest radio group, has filed a pre-arranged bankruptcy approved by more than 60 percent of its creditors in U.S. Bankruptcy Court in New York.

Citadel, which owns 165 FM stations and 58 AM stations in 25 states, stated in its bankruptcy petition $1.4 billion in assets and $2.5 billion in debts. Its three largest unsecured creditors include The Walt Disney Co., JPMorgan Chase, and Wilmington Trust Corp.

Citadel syndicates ABC News Radio, "The Huckabee Report," and "Imus in the Morning," among other programming. Under the agreement with creditors, Citadel reduces its $2.1 billion in loans to roughly $762 million in return for secured creditors owning 90 percent of the equity of the re-organized radio giant. Citadel amassed huge debt in 2006 to complete the purchase of ABC News Radio from Disney, after which radio advertising began to spiral downward.