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(Reuters) – FriendFinder Networks (FFNT.PK), which publishes the adult magazine Penthouse, filed for Chapter 11 bankruptcy on Tuesday with the aim of cutting its debt load as the company struggled to make certain loan payments, a court filing showed.
The holding company, which also houses internet sites such as adultfriendfinder.com, listed out estimated liabilities of $500 million to $1 billion and assets less than $10 million, according to a court filing.
FriendFinder has not turned in a net profit at least since 2008, Thomson Reuters data shows. Total revenue for the four consecutive fiscal quarters ended June 30, 2013 was $293.70 million, a filing showed.
“Despite continuing member interest and high volume traffic, the debtors did not make certain payments to the holders of existing first lien notes and cash pay second lien notes which constituted a default under their respective indentures,” FriendFinder said in the filing.
FriendFinder said it agreed with certain holders of its senior debt to restructure its balance sheet and has commenced Chapter 11 proceedings to implement its recapitalization plan.
In 2010 the owner of Penthouse magazine [Marc Bell, pictured] offered to buy rival Playboy Enterprises Inc for $210 million. The deal later fell through.
The case is FriendFinder Networks Inc, Case No. 13-12405, U.S. Bankruptcy Court, District of Delaware.
From Business Week: FriendFinder Networks Inc., the owner of Penthouse magazine and a sex-dating website, sought bankruptcy protection in Delaware after reporting losses in seven consecutive years to 2012.
The Boca Raton, Florida-based company listed assets of less than $10 million and liabilities of as much as $1 billion in today’s Chapter 11 filing in Wilmington, Delaware.
The company hasn’t made a profit (FFNT:US) since at least 2006 and reported a second-quarter net loss of $10.3 million, or 32 cents a share, on Aug. 15. It had cash or equivalents of $38.6 million on Mar. 31 compared with outstanding principal debt of $544 million, according to the financial statement.
FriendFinder was working with advisers and lenders to refinance the long-term debt, Chief Executive Officer Anthony Previte said in the Aug. 15 statement. He said at the time he was confident the debt issue would be resolved.
PMGI Holdings Inc. and 38 other affiliates also filed for bankruptcy.
FriendFinder was delisted from Nasdaq on Aug. 7 and is trading on the OTCQB Marketplace where shares rose 1 cent yesterday to 33 cents.