Image courtesy of the SFX website
SFX Entertainment filed for chapter 11 bankruptcy in the United States today, after a year of financial uncertainties for the EDM conglomerate. The company's assets include the festivals and promoters ID&T, Rock in Rio, and Made Event, as well as online digital music retailer, Beatport. As part of the deal, a new CEO will reportedly replace the company's current CEO, Robert Sillerman, who will remain onboard as chairman. The decision will also see the company be taken private.
As the company goes private, it will erase $300 million in debt and receive $115 million in a "debt-for-equity trade," Forbes reports. The deal was designed so the company could attempt to proceed as normal during the bankruptcy filings.Today's news comes less than two weeks after the company recently received a $20 million investment from Canadian private equity firm, Catalyst Capital Group.The announcement also follows a long list of devastating financial misfires, including but not limited to: a class-action suit against the company by investors, failed attempts at debt restructuring, and a recent all-time low stock pricing.In a statement SFX Entertainment released about the move, Sillerman said: "This expression of confidence from our lenders is testimonial to the vibrancy and potential of our business, and the dedication and professionalism of the over 600 people who make up SFX." Sillerman went on to say that the company's current position is not where he thought it would be, but that the restructuring would give SFX the opportunity to achieve its goals. He added: "I'm looking forward to continuing to be part of the new SFX as Chairman. We will immediately commence a search for a new CEO to lead us as we continue to set the trend in the exploding culture that is electronic music."Beatport also released a statement, clarifying that business-as-usual will not be affected by the bankruptcy. "For all of us here at Beatport, it's just business as usual," they announced in a blogpost. "That means the entire Beatport platform is fully operational without restriction. The store remains open. The streaming service continues uninterrupted. New releases are being added every day. New videos are being scheduled and filmed. Payments to labels and suppliers are ongoing in their usual manner. We look forward to SFX successfully navigating this reorganization, and in the meantime will continue focusing on building the best music experience for the fans, artists, and DJs that make up the electronic music community."Read more on the Wall Street Journal.Follow Alexander on Twitter.