NEW YORK – Penthouse founder Robert Guccione has resigned as chief executive of the racy magazine’s parent company after a steep drop in circulation put the publication on the auction block.

Guccione, 72, started Penthouse in 1965 and ranks as one of the world’s famous publishers of adult magazines along with Playboy’s Hugh Hefner and Hustler’s Larry Flynt.

Penthouse has struggled with a sales declines as Internet pornography lured away its customers. The magazine, which once boasted a monthly circulation of about 5 million, sold just 530,000 copies last December, according to published reports.

Penthouse International, the company that owns the magazine and is controlled by Guccione, said Guccione had resigned as chief executive.

A majority of shareholders appointed Milton Polland as chairman and acting CEO and Claude Bertin as executive vice president, secretary and director, it said in a statement late on Thursday.

Penthouse did not immediately return calls for comment. General Media, the Penthouse International unit that publishes the magazine, filed for Chapter 11 bankruptcy protection in August, and put the magazine put up for sale as part of an agreement with creditors last month.

It named T. Scott Avila, a partner in turnaround firm Corporate Revitalization Partners LLC, as chief restructuring officer.

Guccione owns 85 percent of both Penthouse International and General Media, a court filing shows.

Separately, Penthouse International said it issued 30 million restricted common shares and $115.5 million (72 million pounds) of convertible preferred stock to buy a 99.5 percent stake in Del Sol Investments, an Arizona limited liability company that owns some Mexican oceanfront property.

Penthouse shares closed Thursday at 65 cents, up 7 cents.