Cyrus says appeals court stays ION's Ch 11 exit plan

 @ibtimes on December 17 2009 12:48 PM

* Says decision to delay ION's exit from bankruptcy

* Expects hearing on appeal in January

Dec 17 - A U.S. court of appeals has stayed a bankruptcy court's decision that approved television station owner ION Media Networks Inc's (IIONQ.PK) reorganization plan, Cyrus Capital, a creditor of the company, said.

Cyrus, which typically invests in distressed assets, said the decision from the Second Circuit Court of Appeals delays ION's exit from bankruptcy protection, which was expected to happen on Thursday.

In November, a U.S. bankruptcy judge said he would approve ION's reorganization plan which shifts control of the company to a different group of creditors, rejecting Cyrus' last-minute $250 million offer for control of the company.

Judge James Peck had rejected arguments from Cyrus that ION's reorganization plan could not be approved because it was based on invalid liens to ION's broadcast licenses.

Cyrus expects the court to hear the appeal in January, it said in a statement on Thursday.

ION, the owner and operator of the ION Television broadcast network, filed for bankruptcy protection in May, just hours before reaching an accord with a majority of its senior first-lien debtholders to convert debt to equity in a prenegotiated financial restructuring.

The case is ION Media Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-13168. (Reporting by Santosh Nadgir in Bangalore; Editing by Gopakumar Warrier)

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