A slumping economy and declining advertising revenue forced Peak Broadcasting, owner of six Boise radio stations, to strike a deal with most of its creditors as part of a Chapter 11 bankruptcy filing.
The Fresno, Calif.-based company filed a prepackaged plan of reorganization in U.S. Bankruptcy Court in Delaware on Tuesday, allowing it to continue operating its 11 radio stations. The other five stations are in Fresno.
Peak's Boise stations are news-talker KIDO-AM (580), sports talker The Fan (630 KFXD-AM), hit-music station Kiss FM (103.3 KSAS-FM), Wow Country KAWO-FM 104.3, Mix 106 (105.9 KCIX-FM) and Lite FM (107.9 KXLT).
The company said programming will not be affected and no layoffs are planned. Peak employs about 60 people in Boise.
CEO Todd Lawley said Wednesday that he was optimistic that the company would survive the bankruptcy process.
"Operationally, Peak has improved its position in the markets it serves during one of the most difficult periods in broadcasting history," Lawley said. "I am confident that Peak will emerge from the restructuring with a stronger financial foundation which complements our market-leading radio positions."
The filing is expected to reduce Peak's total secured debt of $93 million by 60%, said company spokeswoman Rivian Bell.
"This is going to be a very quick process," Bell said. "And it is anticipated that this will be completed in about 50 days and without a disruption in operation."
Bell said a drop in advertising revenue and the sluggish economy prevented the company from being able to pay its debts.
Peak had revenues of $24.6 million in 2010, but that dropped to $23 million in 2011, according to court documents. The decline in revenues was partly blamed on a drop in political advertising.
"Advertising as a whole has declined as a continued impact of this long economic recession," Bell said. "That is really the issue here."
Court documents show General Electric Capital Corp. as the largest secured creditor. The reorganization plan provides payments to vendors and other unsecured creditors.
The Idaho Statesman contributed.
