Monday, 8 February 2016

SFX event organisers pay a heavy price for Chapter 11

Many of SFX Entertainment’s largest creditors are SFX-owned promoters who were awaiting deferred payments for selling their events and companies to the failed EDM group. According to a 476-page creditor matrix seen by IQ Magazine.11 of SFX’s 13 largest ‘non-insider’ creditors – (ones not associated with the company’s founder and former CEO, Robert FX Sillerman) are the owners of some of the many companies purchased by SFX since its founding in 2012.

SFX currently lists assets of $661.614m and debts of $490.236m. Sillerman and funds controlled by him own 37.8 per cent of the company’s common stock. IQ says "This means that a large proposition of SFX Entertainment’s creditors are still deeply involved in the company – and have a vested interest in seeing it continue in one form or another."

The largest unsecured creditor is Dutch EDM firm Alda Events which is owed $23.6 million.

SFX also owes $10 million to Made Events, creators of Electric Zoo in New York, Electric Zoo Mexico City and Electric Zoo Beach Tokyo. Chicago promoter React Presents, which organises Summer Set Music & Camping Festival and Spring Awakening, and also owns Clubtix, Inc., is out $5.8m. Principals at Australia’s Totem OneLove Group, which promotes Stereosonic festival, are owed $10.7m (through Artists Alliance Australia Pty Ltd, Beggars Canyon Investments, Deyson Pty Ltd, Sellmark International Pty Ltd & Peter John Raftopoulos). Hoeksema Holdings, run by Theo Hoeksema, the former CEO of Paylogic, is owed $2.5m, while co-founder Jan Willem van der Meer is short $792,000, and co-founder and former CTO Berco Beute $528,000.

Trade creditors are also facing a shortfall, with those listed on the top 40 creditors list including private air-charter firm VistaJet (owed $1m), Epic Tents of Georgia ($442,650), PRS for Music ($327,680), NYC-based app-builder Postlight ($315,000), Front Gate Ticketing ($301,400) and event medical services company CrowdRX ($269,600).

SFX filed for bankruptcy on Monday in a ‘restructuring support agreement’ which wipes over $300m in debt from the company’s books. SFX Entertainment has now been granted initial approval to begin spending part of a $115 million bankruptcy loan. A bankruptcy judge granted the New York-based company access to $80m of the loan, which is being provided by junior bondholders that have worked with the firm on the terms of a restructuring agreement. It will be used to pay off senior lenders and provide $23m to cover operational expenses, reports the Wall Street Journal.

SFX founder and CEO Robert Sillerman (pictured) will resign from the company in the next 60 days and will be replaced on an interim basis by the firm's chief restructuring officer Michael Katzenstein. General counsel Howard Tytel also plans to resign, according to SFX attorney Nancy Mitchel

SFX floated on the New York Stock Exchange in October 2013 for an initial public offering of $13 per share; by the end of January 2016 its share price stood at 13¢. and

No comments:

Post a Comment