SFX Entertainment has officially filed for Chapter 11 bankruptcy. The move seeks to eliminate $300 million in debt off of the company's balance sheet, provide it with fresh capital and convert the outstanding debt into equity to form a private company - the goal of founder Robert Sillerman throughout all of 2015. One other major change will be a shakeup at the top. Robert Sillerman will be replaced as CEO by a still-to-be-named candidate, but remain as Chairman of the board.
"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," says Sillerman in a statement. Of course this was not where we thought we'd be but with this restructuring we have the opportunity to achieve all that SFX can and will be. 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."
Bankruptcy was first previewed at the beginning of January when SFX hired FTI Consulting as chief restructuring officer to explore the option of bankruptcy, though things have been spiraling downward for over a year. Sillerman launched two attempts to either sell off parts of the company, the whole thing or take it private this during 2015 and failed each time. There were rumors of a potential fire sale and PR disasters with their properties like Beatport and TomorrowWorld did not help.
According to the Wall Street Journal, SFX aims to complete its restructuring and exit chapter 11 within six months. Over the coming weeks, we will learn the fates of its many global electronic music assets like Beatport, React Presents, ID&T, Made Event and Totem OneLove Group - if they remain on the books or are spun off to provide some extra liquidity and clear debt.