LOS ANGELES — An auction to sell off the Girls Gone Wild franchise's assets was called off last week because there were no qualified overbids submitted to the bankruptcy trustee.
In February, bankruptcy trustee R. Todd Neilson secured a stalking horse bid for $1.825 million to purchase the brand's assets, including its trademarks, domain names and litigation rights, as well as its assumed liabilities. The stalking horse bidder was an unidentified entity that put up a good-faith cash deposit of $250,000.
With the pre-arranged bid in place, the trustee had planned to drive up the purchase price of the franchise with competing bids to help pay off Girls Gone Wild's Chapter 11 claims.
But with no other qualified bids of $1.925 million — the minimum required for the auction to go on as scheduled on Friday — the auction was canceled.
Now, it is uncertain whether the stalking horse bidder will go through with the purchase agreement. A bankruptcy judge next week will consider the next step for the sale of assets.
The bankruptcy court green lighted the auction in February, approving the bidding procedures and break-up fee.
Neilson in February said he encountered several difficulties in finding a suitable buyer out of an initial 16 potential buyers, 12 of whom entered into nondisclosure agreements and received identical due diligence materials containing the debtors’ confidential financial information.
"First, the debtors are in a specialized business," Neilson noted at the time. "Several potential buyers either had moral objections to the business or concerns that they did not understand how to operate an adult entertainment business.
"Second, at least one potential buyer expressed his concern that, although the debtors were profitable in 2013, they may not be profitable in future years due to a perceived general decline in the adult entertainment industry. Finally, some buyers expressed reservations about buying the debtors’ assets, given its previous management."
Founded by Joe Francis in 1997, Girls Gone Wild's portfolio includes more than a dozen trademark and 69 websites.
Girls Gone Wild's U.S. trademarks, some multiple trademarks for various products, include Girls Gone Wild, Banned From Television, Gone Wild, Girls Gone Mobile, Guys Gone Wild and Mantra. The franchise also includes foreign trademarks for Girls Gone Wild, Banned From Television and Guys Gone Wild in Canada, New Zealand and France.
GGW Brands, one of the company's divisions, filed Chapter 11 bankruptcy in February 2013. At the time of filing, the company claimed it had less than $50,000 in assets. It currently maintains about 25 employees at its Westwood, Calif., offices.
Neilson could not be reached for comment by XBIZ.
