Citadel Broadcasting: court grants 1st-day motions
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Citadel Broadcasting Corp. said Monday that the U.S. Bankruptcy Court for the Southern District of New York has granted all of its first-day motions — including allowing the company access to over $36 million in cash it has on hand and cash it brings in from daily operations to pay workers and vendors.
Citadel, the nation's third-largest radio broadcasting company, filed for Chapter 11 bankruptcy protection on Sunday in a move meant to restructure its heavy debt load. In court documents, the Las Vegas-based company listed its total assets as of Oct. 30 at $1.4 billion and total debt at $2.46 billion.
The company has an agreement with more than 60 percent of its senior secured lenders as part of a pre-negotiated financial restructuring that will eliminate $1.4 billion of its debt.
Citadel said Monday that having access to the funds will let it keep satisfying financial obligations as it restructures its business. The company received court approval to pay wages, salaries, health benefits and other obligations it has to employees as it restructures. The court is allowing it to keep honoring current customer programs as well, Citadel said.
Citadel owns and operates 224 radio stations and produces radio programing for 4,000 station affiliates and 8,500 program affiliates.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.