FriendFinder Networks, owner of adult entertainment website and the popular
magazine publication Penthouse, has filed for Chapter 11 bankruptcy. The
company has been struggling to pull in new revenue in recent years, while
having problems paying back outstanding loans and other debts. In August,
the company was delisted from NASDAQ when their stock trade fell above
one dollar.
FriendFinder is also the owner of multiple online dating sites and adult
websites. In recent years, competition from their rivals has increased
since many internet sites offer adult content for free. In the last fiscal
year, the company reportedly lost close to $50 million. According to documents
filed, the company has debt liabilities at just over $500 million, while
listing assets at under $10 million.
The company claims the filing is the most cost-effective strategy in helping
the company regain control of their finances. The company hopes to eliminate
roughly $300 million in liabilities through restructuring their finances
with a redevelopment plan to be executed this month. The company hopes
to get debt refinanced for the long-term, while working on growth and
develop of other brands.
Penthouse Media Group created the network FriendFinder in 2007 after acquiring
it from Various Inc. In 2011, the company went public after changing their
name. Before the name change the company offered to buy their rival Playboy
Enterprise Inc. for more than $200 million, but the deal fell through
at a later time.