The overly leveraged iHeartMedia filed for Chapter 11 bankruptcy on Thursday.
The owner of 855 radio stations, including New York’s Z100, had stopped making interest payments last month on its $20 billion debt.
Along with the filing, the company announced that it had reached an agreement with creditors holding more than $10 billion in outstanding debt for a restructuring of its balance sheet. In filings, the company listed $12.2 billion in assets.
Some of iHeartMedia’s subsidiaries, including the billboard company Clear Channel Outdoor Holdings, did not enter Chapter 11 proceedings.
“The agreement … is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” CEO Bob Pittman said in a statement.
Late last month, John Malone’s Liberty Media Corp proposed buying a 40 percent stake in a restructured iHeartMedia for $1.16 billion, joining the company with Liberty’s Sirius XM satellite radio service, according to CNBC.
But that deal for a last-minute rescue fell apart — making bankruptcy all but inevitable given that the company had only a 30-day grace period with its bond holders after ceasing to make interest payments on Feb. 1.
The mountain of debt is the result of the leveraged buyout of the company in 2008 by Bain Capital and Thomas H. Lee Partners, when it was still Clear Channel. According to iHeartMedia’s most recent annual report, the held 68 percent of the company’s voting stock.
On Wednesday, the company’s stock closed at 48 cents on the dollar.
Pamela Chelin contributed to this report.