FriendFinder Networks Inc., the owner of Penthouse magazine and thousands of adult-oriented websites, won court approval of its reorganization plan after making changes that mollified a judge’s and regulators’ concerns.
U.S. Bankruptcy Judge Christopher Sontchi at a hearing this afternoon in Wilmington, Delaware, accepted the restructuring plan after FriendFinder eliminated provisions that had caused him to withhold his blessing earlier in the day. The releases covered liability from lawsuits and other causes of action.
“We have resolved the objections of the parties,” Dennis A. Meloro, an attorney for FriendFinder, told the judge when the hearing resumed.
Before the modifications were made, the judge had agreed with the U.S. Securities and Exchange Commission that releases being sought for officers from shareholders weren’t consensual and went “too far.”
“I am prepared to, as changed to reflect the court’s earlier ruling, confirm the plan,” Sontchi said at the end of the later hearing.
“We are satisfied with the changes,” said David L. Buchbinder, a lawyer representing the U.S. Trustee, the Justice Department’s bankruptcy watchdog. He said that Susan Sherrill-Beard, a lawyer for the SEC who led the opposition to the releases, was “fine with the changes as well.”
The lead case is In re PMGI Holdings Inc., 13-bk-12404, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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