Trustee to Be Appointed to Oversee Penthouse's Chapter 11 Case

Trustee to Be Appointed to Oversee Penthouse's Chapter 11 Case

CHATSWORTH, Calif. — A federal bankruptcy judge earlier this week ordered that a trustee be appointed to oversee Penthouse’s Chapter 11 filing.

So far, the U.S. Trustee’s Office is interviewing potential candidates to serve in the position.

In the meantime, principal debtor Dream Media Corp. has consented and a federal judge has approved Penthouse’s management use of $118,000 in funds to make certain payments.

Those expenditures are set to pay for freight and postage expenditures made for its publishing division and movie contents for its broadcast division, along with employee and digital media expenditures.

Penthouse’s Chapter 11 papers were filed in U.S. Bankruptcy Court in Woodland Hills, Calif., in mid-January.

Before Penthouse CEO Kelly Holland’s purchased it, the brand was owned by FriendFinder Networks Inc. and underwent a bankruptcy in 2013. Another bankruptcy occured in 2003.

In the current case, Dream Media claims the company defaulted on loans to ExWorks Capital Fund. Dream Media now holds the loans and claims Penthouse owes it more than $10 million.

Holland did not immediately respond for XBIZ comment on the appointment of a trustee, who will oversee day-to-day business operations.

In January, Holland noted that the brand’s publications, broadcast operations, digital media presence and licensing would continue uninterrupted.