Penthouse Plan Pays Creditors in Full

Penthouse Plan Pays Creditors in Full
Rhett Pardon
NEW YORK – The publisher of Penthouse magazine has filed an amended reorganization plan with U.S. Bankruptcy Court that pays creditors' claims in full.

General Media Inc. said this week that up to $12 million in allowed unsecured creditor claims and the claims of holders of about $40 million in notes will be paid in full in cash.

The company owns Penthouse magazine and four other magazines as well as a DVD and video line, and it licenses the Penthouse brand. It also owns online adult websites.

Under a plan submitted to the court this week, Mexican entrepreneur Luis Molina will acquire 75 percent of the preferred stock of General Media for about $10.25 million. It will be financed through a $30 million senior secured debt facility, and loans and equity to be provided by Molina and others.

In related news, creditor Marc Bell agreed to withdraw another proposal that would have given him ownership of the company.