Texas mass media company iHeartMedia is currently involved in a dispute that it is attempting to solve through mediation. Lenders are saying the company is in default on billions of dollars of debt after transferring an alleged $1.241 billion in shares from a company subsidiary to an unrestricted subsidiary.
The group of lenders, which holds over $3 billion in debt, claim that the transfer violated the terms of their loan agreements with the company and triggered default. iHeartMedia disputes this, and says the transfer was a permissible investment under the loan agreements. Trial on the issue us set for this month, but attempts are being made to resolve the dispute before trial begins.
The company has reportedly begun the mediation process with some of its lenders and bondholders to see if it can block the declaration of default. If the dispute is not resolved in mediation and the judge rules for the lenders at trial, iHeartMedia would at that point have 60 days to revoke the stock transfer or come up with some other arrangement with the lenders. If nothing is done, the company would face major debt default. Not much is known about the mediation efforts that are being made, other than that mediation will run until an agreement is reached or the beginning of the trial later this month.
One of the most important factors in mediation, of course, is the mediator. A skilled mediator possesses the experience, knowledge, skills and qualities necessary to address the issues at play in the dispute and to help the parties begin and continue effective communication until a mutually acceptable agreement is reached. Finding the right mediator for each dispute is not always easy, but is important to ensure the process is as effective as possible.