4-3-2012
As expected a proposal to create an employee benefit plan was approved at a special Emmis shareholder meeting in Indianapolis yesterday. Jeff Smulyan is trying to turn the company around and says six dissident preferred shareholders are standing in the way. Emmis owes millions to preferred shareholders in back dividends and the company is trying to get that wiped off the books which would help Emmis save money and continue on a turnaround path. Some Wall Streeters say a contract is a contract and that money is owed. A court may have to decide.
Emmis, like many radio companies, was hit hard when the economy went into a recession. Some didn't recover and had to file for bankruptcy. Emmis has been attempting to survive, even selling off several properties in Chicago. The company stock price is below $1.00 and it has been threatened with delisting. Emmis has even taken a preemptive step of asking a court to rule on whether what it's trying to do with preferred shareholders is even legal. The court has not ruled yet. A second shareholder meeting will be held at some point in the near future which would give Emmis the right to eliminate the back dividends. No date for that meeting has been announced yet. Smulyan has said he feels better now about the future of the company than he has in years. And, he said yesterday the company has dealt fairly with the holdouts, who've had offers to sell their shares at market price, recently falling in a range of $16 to $22. There are six holdout preferred investors. The two largest investor funds in that group bought their shares for between $13 and $17.76 a share.
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