Citadel Broadcasting reorganization plan gets court nod

May 20 (Reuters) - Citadel Broadcasting Corp CTDBQ.OB received bankruptcy court approval for a reorganization plan that will slash $1.4 billion of the company's debt and clear the way for the radio broadcaster to exit Chapter 11.

In court papers filed on Wednesday, Judge Burton Lifland of the New York bankruptcy court overruled objections by shareholders led by Aurelius Capital Partners LP, who had argued that the reorganization plan undervalued Citadel.

Under the plan, senior lenders will receive a share of a new term loan and 90 percent of new common stock in the reorganized company. Existing shares will be wiped out.

Citadel, the third-largest U.S. radio broadcaster with 165 FM stations and 58 AM stations, filed for the bankruptcy in December under a pre-negotiated deal with a majority of its senior lenders.

It had taken on debt to buy ABC Radio Networks from Walt Disney Co (DIS.N) in 2006.

The case is In re: Citadel Broadcasting Corp, U.S. Bankruptcy Court, Southern District of New York, No. 09-17442. (Reporting by Santosh Nadgir in Bangalore; Editing by Unnikrishnan Nair)