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Judge approves latest plans to take SFX out of bankruptcy

By | Published on Tuesday 4 October 2016

SFX Entertainment

A judge last week reportedly approved the latest plans to bring SFX out of bankruptcy, with a court date now set for 9 Nov, seemingly to formally confirm the proposals.

The publicly listed dance music focused firm applied for bankruptcy protection back in February of course, and has been working ever since on a deal with its creditors that will enable the business to come out bankruptcy as a private company with minimal debts. Some assets have been sold along the way, though the company has kept hold of digital music platform Beatport as well as its core festivals business.

The plan approved by judge Mary Walrath outlines how different debtors will be treated, and how equity in the all-new SFX will be divided between key lenders. The biggest change in the most recent version of the plan related to how unsecured creditors will be treated.

According to Amplify, as well as signing off on the plan, Walrath also rejected a request by shareholders in the pre-bankruptcy SFX to participate in the restructuring talks, which is basically the end of the road for those former investors seeking some involvement in the future of the business.

The approved plan also sets out which former SFX execs could be sued over their leadership of the company, with founder and former CEO Robert FX Sillerman the most likely defendant in any such case.

And the latest plan notes that: “Possible causes of action against Mr Sillerman include claims for breach of fiduciary duty, breach of contract, negligent misrepresentation and fraud. In addition, the debtors claims include claims against and arising from agreements with entities affiliated with Mr Sillerman, including, for breach of contract, negligent misrepresentation, and fraud”.



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