Reservoir Media, Inc. (RSVR) is a music publishing and recorded music company whose balance sheet is dominated by intangible assets—primarily music catalog rights—which receive a 0% recovery haircut under the liquidation lens. As of December 31, 2025, total assets are $941.9M, of which intangible assets net of accumulated amortization constitute $797.2M (85% of total assets). Under liquidation, these intangibles are zeroed out entirely. The remaining tangible and financial assets—cash $20.6M (100% recovery), net AR $37.1M (90-95% recovery, call it ~$35M), royalty advances $69.5M (uncertain collectibility, likely 50-60 cents on dollar), PP&E net $0.5M (50-70% recovery), operating ROU asset $7.3M (negligible liquidation value), other current and non-current assets roughly $9.2M (partial recovery)—yield gross liquidation proceeds of perhaps $130-145M under generous assumptions. Against this, total liabilities stand at $567.1M at face value: long-term debt (net of deferred financing costs) represents $452.3M principal ($455.8M gross), accrued royalties $47.9M (a real cash obligation on wind-down), deferred tax liabilities $40.9M, operating lease liabilities $7.2M non-current plus implicit current portion, and other current liabilities totaling approximately $65.6M current liabilities in aggregate. The liability stack at face value exceeds recoverable asset value by a wide margin. MFFAIS confirms: latest CLV is -$504.5M, LLV is -$467.4M, OLV is -$467.4M. Equity recovery to common is deeply negative under any scenario. Compared to the prior filing (period ended September 30, 2025), gross debt increased by $30.0M (from $425.8M to $455.8M), driven by net borrowings of $64M ($79M draws, $15M repayments) to fund $97.9M of music catalog acquisitions during the nine-month period. Investing outflows for the nine months were $100.0M vs. $71.9M in the prior-year nine-month period, accelerating the intangible asset base and correspondingly deepening the liquidation deficit. A remaining material weakness in internal controls (related to the third-party Recorded Music royalty system) persists through December 31, 2025, though management states the financials are fairly presented. The debt matures December 2027; no near-term maturity risk, but refinancing risk is real given the single-facility concentration. Three interest rate swaps with aggregate notional of $215M partially hedge floating-rate exposure through December 2027. Filing discusses intangible asset fair value as central to the Senior Credit Facility covenant (consolidated senior debt to library value ratio ≤0.45:1.00) but does not separately XBRL-tag the library value or the covenant ratio calculation.
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