Fuse Media, which has endured a rocky stretch in recent months after its flagship cable network was dropped by major pay-TV providers, has filed for bankruptcy protection.
The company said it has opted for a pre-packaged Chapter 11 restructuring, which is a more streamlined version of the bankruptcy process. It has filed a proposed reorganization plan with U.S. Bankruptcy Court in Delaware.
More than 80% of those who own notes in the company, have approved of the plan, Fuse said. The road map will allow Fuse to reduce its secured debt by about $200 million while also lowering the related interest expense.
The bankruptcy news comes two weeks after the exit of the company’s longtime CEO, Michael Schwimmer. Over the past several months, Fuse was dropped by Comcast and Verizon FiOS and went into default on a loan after missing an interest payment.
Pending the final voting of noteholders and the approval of the Bankruptcy Court, the plan will enable Fuse to complete the process and emerge from Chapter 11 protection during the second quarter of 2019. The expectation is that Fuse will be able to maintain daily business activities and meet its obligations, including payroll. In announcing the bankruptcy, Fuse said it is “confident” that it will have “sufficient liquidity to continue to meet its commitments while it works to achieve its financial goals.”
Fuse has traveled a unique path through the cable industry. It traces its roots to SíTV, which was the first English-language entertainment network aimed at the Latino community. It rebranded NUVOtv in 2011, and the following year forged a strategic alliance with Lopez and her company, Nuyorican Productions. In 2014, Fuse was acquired for $226 million from the Madison Square Garden Co.
“Unlike many other companies in our industry, Fuse has been experiencing growth across platforms, but we have been unable to realize the full benefits of this progress because of the significant amount of debt on our balance sheet,” Fuse CFO and interim CEO Mike Roggero said. “The Chapter 11 process provides a proven framework to efficiently address these challenges in order to position our business for long-term success. It is a logical next step toward ensuring that we are able to provide entertainment content to a traditionally underserved audience for many years to come.”