FriendFinder Networks Inc., the owner of Penthouse magazine and a group of dating websites, sought U.S. Bankruptcy Court protection after logging losses in seven consecutive years.
The Boca Raton, Florida-based company, operator of fastcupid.com, gayfriendfinder.com, lesbianpersonals.com, socialflirt.com and getiton.com, as well as sites categorized by country, listed assets of $465.3 million and debt of $661.9 million in today’s filing in Wilmington, Delaware. The company said it had reached a deal with creditors to reorganize under Chapter 11.
“The agreement with the overwhelming majority of our noteholders will allow FriendFinder Networks to refinance our long-term debt, permit us to reinvest in our business, and position some of the strongest brands in the market for additional growth,” Chief Executive Officer Anthony Previte said in a statement.
The company’s reorganization plan would reduce annual interest expenses by more than $50 million and eliminate approximately $300 million of secured debt, according to the statement. Common stock will be canceled.
FriendFinder said holders of more than 80 percent in principal of both the 14 percent senior secured notes due in 2013 and the 11.5 percent non-cash pay secured notes due in 2014 agreed to transactions involving cash, new notes or common stock.
The company hasn’t made a profit 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 March 31, compared with outstanding principal debt of $544 million, according to the financial statement.
PMGI Holdings Inc. and 38 other affiliates also filed for bankruptcy after the company defaulted on note payments, according to court filings.
FriendFinder was delisted from Nasdaq on Aug. 7. The shares rose 1 cent yesterday to 33 cents in over-the-counter trading.
The case is In re FriendFinder Networks Inc., 13-bk-12405, U.S. Bankruptcy Court, District of Delaware (Wilmington).