• by Erik Sass , March 3, 2010

A gradual improvement in the radio business came too late for Regent Communications, which was forced to file for Chapter 11 bankruptcy protection and turn over controlling equity to its creditors.

Per the terms of an agreement with its senior lenders, the prepackaged bankruptcy filing will give a majority stake to Oaktree Capital Management, the biggest creditor, while cashing out Regent stockholders at a price of $0.128 per share.

According to a news release from Regent, the move is intended to reduce the company's debt by $87 million.

Several financial analysts predicted the Regent bankruptcy filing late last year and in the first months of this year. On December 31, Regent missed a scheduled payment on its $165 million debt, prompting Standard & Poor's to downgrade its credit rating.

Regent was delisted from the NASDAQ stock exchange Friday after failing to raise its share price above $1, the minimum requirement for listing.

A number of radio groups have taken financial blows from one of the worst economic downturns in living memory. In December 2009, Citadel filed for Chapter 11 bankruptcy protection and was delisted by the New York Stock Exchange.

In January 2010, Air America filed for bankruptcy and ceased broadcasting. More recently, Spanish Broadcasting System was warned in mid-December that it faces delisting from NASDAQ, but appealed and received a waiver lasting until June, giving it another four months to raise its stock price above the minimum price.

There have also been a series of deals that narrowly averted bankruptcy.

In February 2009, Liberty Media acquired a 40% stake in Sirius-XM, infusing $530 million and allowing the newly merged satcaster to avoid a bankruptcy filing. In June 2009, Cumulus Media reached an agreement amending debt covenants so that Cumulus could avoid being declared in default if it violates certain provisions, lasting until March 31, 2011. Cumulus carries just under $650 million of debt.