The Wall Street Journal reports that Citadel Broadcasting Corp., owner of San Francisco’s KGO-AM 810 and KSFO 560, is discussing with its creditors a “pre-arranged” Chapter 11 filing that would reduce the company’s debts from $2 billion to $760 million.

The bankruptcy would wipe out individual shareholders, whose shares are currently worth about 5 cents each. That’s down from $16 in 2004.

The article notes: “As bad as things are, Citadel has outpaced rivals this year. Its revenue through the end of September dropped 14.7%. Clear Channel’s revenue, meanwhile, slid 19.2%, while CBS Radio decreased 23.2%.”

The word locally is that both KGO-AM and KSFO are among the few bright spots in the company, which has about 4,000 employees and 243 stations including the former ABC Radio O&Os such as KABC-AM Los Angeles, WABC-AM New York and WLS-AM Chicago.

Creditors have until Tuesday to approve the bankruptcy plan.