Penthouse Faces New Hurdles
According to reports, Guccione is still in control of the editorial content for Penthouse as he waits for a final nod from the U.S. Bankruptcy Court for the Southern District of Manhattan on his proposed reorganization plan, according to The New York Post.
According to Guccione's lawyer, the reorganization plan was filed this week and is not expected to receive approval from the bankruptcy court until the end of February.
However, the end result of that reorganization could mean that Guccione's creditors could very likely take control of General Media, the parent company of Penthouse that Gucionne founded in the 1960s.
According to The Post, the terms of Guccione's Chapter 11 filing state that the old bondholders, who are owed about $45 million, will exchange the notes for 1 million shares of common stock in the company and $27 million in new notes. That could easily sway control of the company onto the creditor's side.
Guccione's lawyer was quoted as saying that creditor-control might be a good thing for Penthouse and General Media.
"These guys are prepared to invest and really grow the business in video, cable and the Internet," he told The Post.
Additionally, Guccione will retain his title and control of the porn magazine's editorial content and will draw in an annual salary of $500,000 for the next ten years, a far cry from the financial hardships the porn publisher has endured over the past few years.
As advertising sales met with a steady decline and circulation numbers for Penthouse were crimped by the raging popularity of porn over the Internet, Guccione has been forced to divest his own personal fortune, including real estate, in order to stay afloat.
Guccione put his East Side townhouse on the sale block with an asking price of around $30 million. According to The Post, he also sold a substantial portion of his art collection to appease creditors, which is reportedly valued at around $100 million.