SUNNYVALE, Calif. — FriendFinder Networks Inc. announced today that it has obtained confirmation of its plan of reorganization from U.S. Bankruptcy Court, paving the way for the social-networking company and publisher of Penthouse magazine to emerge from bankruptcy by year-end.
The plan of reorganization, once implemented, will strengthen the company's balance sheet and enable FriendFinder Networks to grow its flagship brands, the company said in a statement this evening.
The plan is expected to reduce the company's annual interest expense by more than $50 million, eliminate approximately $300 million of secured debt and return control of the company to FriendFinder Networks founder, Andrew Conru.
On emergence, senior secured notes due 2013 will be exchanged for new notes in the same principal amount, plus certain additional consideration in the form of cash or notes. Holders of other secured other notes will receive substantially all of the new common stock to be issued by a reorganized FriendFinder Networks, plus cash consideration subject to certain conditions.
The company's current common stock will be extinguished once the agreement becomes effective and will no longer trade on the open market.
FriendFinder Networks operates AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder. com, BigChurch.com and SeniorFriendFinder.com, among others. FriendFinder also owns its video production line and engages in brand licensing.
The Sunnyvale, Calif., company filed for Chapter 11 bankruptcy protection in September in Wilmington, Del., after reporting losses in seven consecutive years. It listed assets of less than $10 million and liabilities of as much as $500 million to $1 billion.
FriendFinder CEO Anthony Previte, who took over the top post in July of 2012 after Marc Bell stepped down from his position, will be keynote speaker at the 2014 edition of XBIZ 360 Digital Media Conference in January.