After spending several years shuffling money between subsidiaries (including creating new ones to raise/preserve capital) and playing footsie with creditors holding more than $20 billion dollars of its debt, iHeartMedia, the nation’s largest radio conglomerate, skipped a scheduled $106 million interest payment on some of its loans earlier this month, triggering a 30-day default-clock. iHeart is portraying this move as something done to increase its leverage over creditors, who might be compelled to agree to new terms and avoid restructuring – but this is precisely what tripped Cumulus Media into Chapter 11 bankruptcy late least year.

None other than the Wall Street Journal calls what’s likely to happen between now and March 3 a “costly reckoning.” If iHeart follows the Cumulus bankruptcy model, preferred (institutional) investors will get a greater share of the restructured company, while others will lose everything. The firms who took iHeart private last decade may not be compensated at all in restructuring, but the WSJ reports that they’ve already “managed to offset virtually all of the potential loss of iHeart’s equity,” and will generally be able to walk away after more than doubling the company’s debt in the buyout process.

Meanwhile, Cumulus Media has cleared a significant hurdle in its own bankruptcy proceeding, as a New York judge approves a revised “disclosure statement” from Cumulus that details which contracts and creditors it can jettison and which ones will be compensated, and to what degree. To recap, “secured” lenders that held about 75% of Cumulus’ debt ($1.7 billion of the $2.3 billion total) will end up with more than 83% of the equity in the reorganized company, in exchange for agreeing to give up more than $400 million in outstanding loans. However, “unsecured” lenders, who held more than a quarter of the company’s debt ($610 million), will receive just a 16% stake in a restructured Cumulus.

Creditors with voting rights will receive packets and ballots next week, with voting on the restrucruring to conclude by March 23, and another court hearing has been scheduled for April 12 to confirm the results. Generally speaking, restructuring-approval votes are scheduled only if the company in question is confident that they will succeed. Cumulus executives would like to exit the Chapter 11 process by May or June.

Considering that iHeartMedia’s debt is ten times that of Cumulus’, the number of affected creditors is much larger and the proportional compensation that will be offered them is much more complicated…and we won’t know the details until the company’s legal coterie files the Chapter 11 paperwork. However, neither company will exit these processes debt-free. It’s well understood that the best possible outcome is a total reduction of liabilites by about 50%.

That will still leave Cumulus a billion dollars in the hole, and iHeart $10 billion. Industry analysts seem to think that this load-lightening will provide both companies with more breathing room to compete in an increasingly crowded audio content-creation and -delivery business…but if all it does is provide both companies with more opportunities to run up more debt, who really wins in such deals?