Source Home Files Bankruptcy as Readers Turn to WebPhil Milford
Source Home Entertainment LLC, a closely held magazine publisher and distributor, filed for bankruptcy protection as more readers abandon print and turn to electronic media.
The company, based in Bonita Springs, Florida, listed assets of $205 million and debt of $290 million in Chapter 11 papers filed in U.S. Bankruptcy Court in Wilmington, Delaware. Affiliates Source Interlink International Inc. and Directtou Inc. also sought court protection.
The bankruptcy stemmed partly from “the continuing fundamental technological shift away from traditional consumption of print media toward online magazines and e-book readers,” Stephen Dube, the company’s chief restructuring officer, said in a filing.
Source Home fired more than 5,000 employees on May 30 when it halted distribution operations, according to court filings. The company had centers in Pennsylvania, Illinois and California. The shutdown stemmed from Time Inc.’s decision to stop using Source Home’s Source Interlink unit to distribute its magazines because of unpaid fees, the New York Times reported.
Source Home also makes retail checkout displays. Its largest unsecured creditors are Time/Warner Retail Sales & Marketing of Parsippany, New Jersey, owed $53.7 million; Curtis Circulation LLC of New Milford, New Jersey, owed $49.1 million; and the Chicago Newspaper Publishers Drivers’ Union Pension Trust, owed $8.31 million, according to court papers.
The case is In re Source Home Entertainment LLC, 14-bk-11553, U.S. Bankruptcy Court, District of Delaware (Wilmington).