LAS VEGAS (
, the nation's No. 3 radio broadcaster, plans to file for bankruptcy protection as early as Sunday, according to a published media report.
The Las Vegas-based company is expected to file a "prearranged" bankruptcy that has the support of many creditors, according to the report, which
The Wall Street Journal
published on its Web site Sunday.
The report, which cited anonymous sources familiar with Citadel's situation, said the company plans to exchange new equity for a large portion of the debt owed these creditors, reducing its debt load to about $762.5 million.
The creditors would end up controlling the company, and the company's existing shares would be rendered worthless.
Citadel will need to win over more creditors, however, to get a bankruptcy judge to sign off on its reorganization plan, the report added. The company's board approved the bankruptcy filing in recent days, the report said.
Citadel warned in November that it might have to file for bankruptcy protection because of its large debt burden. It also said that it had been hurt by an industry-wide slump in advertising revenue.
Citadel's shares closed Friday at 1.6 cents.
-- Written by a member of the TSC Staff.
This article was written by a staff member of TheStreet.com.