As the bankrupt promoter goes through a process of restructuring, it looks like download service Beatport will be the first subsidiary to go
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Nine months after filing for bankruptcy, dance music group SFX Entertainment has been given the go-ahead to emerge from administration
By IQ on 10 Nov 2016
US bankruptcy judge Mary F. Walrath today approved SFX Entertainment’s fifth and final reorganisation plan, bringing to an end nine months of bankruptcy.
Under the plan, SFX’s debts will be slashed by close to US$400 million.
Walrath rejected claims by two shareholders the business was undervalued. Denis Brisson and Valery Burlak argued in the Delaware bankruptcy court yesterday that the EDM conglomerate, which went into administration in February, is worth more than SFX’s self-valuation of $115m–$160m.
SFX’s lawyers, Greenberg Taurig, countered that claims of bad faith were “baseless” – and Walrath was in agreement, ruling that “there is no evidence before me that the debtors who presented the plan, or the lenders or the unsecured creditors who negotiated and participated in the plan, acted in anything but good faith”.
“There is no evidence before me that the debtors who presented the plan … acted in anything but good faith”
Court documents reveal Walrath estimates unsecured creditors – or those with no assets as collateral – will receive “perhaps 10¢ on the dollar” from the deal.
In a separate ruling, SFX was also given approval to terminate its lease on its 902 Broadway headquarters in New York, effective 31 October.
Claims against SFX’s chairman and former CEO, Robert FX Sillerman, for alleged breaches of corporate responsibility over his failed attempts to take the company private remain unresolved.
Former AEG Live CEO Randy Phillips was confirmed as SFX’s new CEO earlier this week.
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