The third time’s the charm. Penthouse Global Media, Inc. has filed for Chapter 11 bankruptcy protection for the third time. The company previously filed for restructuring in 2003 and 2013. The 2018 filing said little about the company’s debt, but listed estimated liabilities of between $10.0 million and $50.0 million. Interestingly, its two top creditors are law firms Greenberg Traurig, LLP and Bayard P.A.
The company will use the Chapter 11 proceedings to streamline and strengthen the business. The company has secured commitments for debtor-in-possession financing to continue operating.
An offshoot of Penthouse Magazine, Penthouse Global Media took on debt during a 2016 management buyout. The company’s current owner, Kelly Holland, said she wanted to get rid of any misogynistic content but wanted to remain committed to the brand’s trademark mix of thought-provoking articles and erotica.
“It’s about beautiful nude women, but we deal with real subjects,” she said.
While Penthouse Global Media makes most of its money from its cable and satellite channels, Holland said she wanted to expand its licensing business. This includes exploring “breastaurants,” to compete with brands like Hooters, Inc.
“I have a strong opinion of where this company needs to go,” Holland said. “We should own that soapbox that says ‘Sex.’”
The flood of free online pornography has undermined the financial stability of more than just Penthouse Global Media. Rival Playboy Enterprises Inc is also facing troubles. According to one report, Playboy is looking at ending its print magazine. When founder Hugh Hefner died in September 2017, ownership of the company shifted from his family to its largest shareholder, private equity firm Rizvi Traverse Management LLC.
Ben Kohn, a managing partner at Rizvi, wants to follow a similar path as Penthouse Global Media and shift the company’s emphasis to brand partnerships and licensing deals.