Citadel Broadcasting Corp. (CTDBQ) changed its compensation plans for top management after complaints that they violated the terms of its bankruptcy reorganization.
Citadel, the third-largest radio broadcaster in the U.S., exited bankruptcy protection in June owned by creditors including JPMorgan Chase (JPM), The Wall Street Journal said.
R2 Investments, another creditor, said that Citadel's compensation plans, including the one for CEO Farid Suleman, violated the restructuring agreement.
R2 alleged that Suleman was on course to get stock valued at more than $55 million, with directors getting $1.35 million each. R2 said this made them the "highest paid management in the terrestrial radio broadcasting industry."
R2 labeled the compensation plan "one of the most egregious frauds by a company emerging from Chapter 11."
On Tuesday, R2's lawyers filed court papers saying Citadel had "voluntarily" agreed to rescind stock awards and instead issue stock options.