SFX Entertainment files for bankruptcy

SFX Entertainment files for bankruptcy

SFX Entertainment, after a year clinging on for dear life following a rapid collapse in its stock price and rising debts, has finally filed for bankruptcy in the US. 

The Chapter 11 bankruptcy pleading seeks to erase $300 million in debt amassed by the company. The restructuring would see the issuance of $115m in debtor-in-possession financing, which may allow the company to continue to operate without major disruption to its festivals.

The bankruptcy proceedings only involve the company’s US operations, and Robert F.X. Sillerman will be stepping down from the role of CEO but retaining that of Chairman. 

Investors on the other hand have probably written off their investment in the company entirely, as shares have now plunged to $0.07.

Some shareholders will be hoping something comes of the lawsuit filed in August of last year, which accuses Sillerman of breaching his fiduciary duties when he made an offer to take the company private at $5.25 before failing to come up with the cash. However, given the bankruptcy and the hefty losses it is unclear where money for a settlement could come from. 

 

(Andrea Leonelli)