Citadel Broadcasting to File for Bankruptcy

The Wall Street Journal reports:

Citadel Broadcasting Corp., the third-largest radio broadcaster in the U.S., plans to file for bankruptcy as soon as Sunday, according to people familiar with the matter.

Citadel is expected to file in a deal supported by many lenders collectively owed $2 billion, known as a "prearranged" deal in bankruptcy parlance.

These lenders plan to swap a big portion of their debt for equity in a reorganized Citadel, effectively handing them control.

The deal would reduce Citadel's debt load to about $762.5 million, the people said. The company will need to solicit more creditor support in court to get its reorganization plan approved by a judge.