Robert Sillerman says his new company is still on track to become the "preeminent digital media publisher", despite its delisting from the Nasdaq amid mounting debt
news
Function(x) future unclear as Sillerman heads for bankruptcy
Robert Sillerman's attempts to build an SFX-style clickbait empire could be reaching their end, as the Function(x) founder files for chapter-11 bankruptcy
By Jon Chapple on 12 Feb 2018
Sillerman as CEO of SFX Entertainment
Robert Sillerman’s troubled Function(x) web business is edging closer to insolvency following attempts by creditors to force the former SFX Entertainment chief into involuntary bankruptcy.
Chicago-based EDM promoter React Presents and its ticketing platform, ClubTix, in December 2017 won a judgment against Sillerman over an unpaid US$10m promissory note relating to the company’s 2014 acquisition by SFX. SFX filed for bankruptcy in February 2016 owing almost half a billion dollars.
Sillerman has since filed a petition to convert React’s request for ‘chapter 7’ (ie straight, or liquidation) bankruptcy into chapter 11 bankruptcy, wherein the bankrupt debtor is able to keep the company alive while they restructure.
Now, Sillerman’s current financial woes have caused his new company, Function(x) – an online news outfit specialising in clickable ‘viral’ content, which Sillerman has grown aggressively through rapid SFX-style consolidation – to warn the company could be facing a difficult future without monetary support from its CEO.
“There are no assurances the company will be able to secure an alternative source of funding”
In its latest current report filing with the US Securities and Exchange Commission (SEC), Function(x) explains to shareholders that, as executive chairman and CEO, Sillerman has historically provided “support to the company in form of cash and guarantees of company’s obligations”.
However, it warns, Sillerman may now “be unable to provide financial support to the company in the foreseeable future”, and that “there are no assurances the company will be able to secure an alternative source of funding.”
Function(x) furloughed three quarters of its employees last September after finding itself unable to pay their wages. In June, the company was delisted from the Nasdaq stock exchange after failing to meet the deadline for filing its quarterly report.
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.
Deprecated: File Theme without comments.php is deprecated since version 3.0.0 with no alternative available. Please include a comments.php template in your theme. in /var/www/html/wp-includes/functions.php on line 5653