NEW YORK — A group of Hollywood studios suffered a setback Tuesday in their efforts to have a judge replace the management of Grant Broadcasting System, a television station chain that last year sought bankruptcy court protection while owing its TV-program suppliers $225 million.
In a written opinion, Bankruptcy Judge David A. Scholl in Philadelphia said that the company has "an outstanding management team," and should be given a chance to "regroup" using bankruptcy court protection.
"They have a substantial probability of success, even in the face of spirited opposition from several different sources," he said, referring to the program suppliers and bondholders who have resisted Grant's reorganization effort.
The bankruptcy reorganization, filed in Philadelphia where Grant's largest TV station operates, is the biggest ever by a television broadcaster and has been followed closely by the television industry. Many program suppliers fear that other financially troubled broadcasters will seek to shed their debts to suppliers if Grant succeeds in its efforts.