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CEO Randy Phillips' plan to turn SFX 2.0 into 'an essential company in live entertainment' looks unlikely to be derailed by disgruntled creditors
By Jon Chapple on 09 Dec 2016
The dance music behemoth formerly known as SFX Entertainment has emerged from bankruptcy ahead of schedule – and with a new name to boot.
SFX, originally slated to exit the chapter 11 (administration) process in early 2017, became officially solvent once more last Friday (2 December) and is henceforth known as LiveStyle Inc., bringing to an end four and a half years of SFX Entertainment.
As confirmed by IQ last month, the newly debt-free LifeStyle is run by CEO Randy Phillips, formerly of AEG Live and Global Entertainment.
“LiveStyle has the same potential that AEG Live had when I assumed the reins of that company as CEO,” says Phillips. “In fact, it has many more assets to build upon, has an impressive management team, especially at the event level, including most of the original founders of these world-renowned festival brands. [SFX/LiveStyle’s festival franchises include Electric Zoo, Tomorrowland, Mysteryland and Spring Awakening.]
“Armed with no debt, a recapitalised financial structure and an incredibly supportive board, we will build LiveStyle into an essential company in the live entertainment sector”
“Armed with no debt, a recapitalised financial structure, and an incredibly supportive board, we will build LiveStyle into an essential company in the live entertainment sector. Having done this once before, my team and I are very excited to get started.”
Phillips elaborated on the name change in an interview with Billboard, telling the magazine: “Every time I said the name ‘SFX’ to someone, I got this negative reaction – people would make the sign of the cross.”
The new CEO also revealed he plans branch out from the “EDM”, or electronic dance music, that made SFX (in)famous, saying: “We’re going to be a music company that specialises in electronic music” (emphasis ours), suggesting that Mysteryland, for example, “will be broadened, more like Coachella”.
The clean slate for LiveStyle was granted over the objections of two major shareholders – Denis Brisson and Valery Burlak – who argued last month SFX had, with its estimation of US$115m–$160m, undervalued itself in order to ensure a swift emergence from administration.
“It is in the public’s interest to not allow bankruptcy to be used as a means for public companies to shield themselves from fraud”
Burlak’s objection was dismissed on 22 November by Delaware bankruptcy judge Mary F. Walrath, who, “after due deliberation”, denied the motion as “moot”.
Brisson, meanwhile, on Wednesday launched a fresh bid to recoup some of his money by having the decision to approve SFX/LiveStyle’s termination of its bankruptcy overturned.
Representing himself, Brisson argued “the merits of his objection to the [reorganisation] plan were not evaluated fairly by the bankruptcy court, and that the court had already prepared a canned response to his objection”.
Among other complaints, Brisson said it is in “the public’s interest to not allow bankruptcy to be used as a means for public companies to shield themselves from fraud” – referring to alleged fraudulent trading by the company’s now-ousted CEO, Robert FX Sillerman – and says the final agreement between debtors and creditors was conducted secretly, when it should have been “provided to the court or released publicly”.
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