SFX Covers All Bases in Bankruptcy Case
With entertainment conglomerate SFX filing for Chapter 11 bankruptcy at the beginning of the month, they are now making sure to cover all their bases when it comes to their debts. Letters have been sent letting anyone affiliated with the company know that: “The filing of the case imposed an automatic stay against most collection activities. This means that creditors generally do not take action to collect debts from the debtor or the debtor’s property. For example, while the stay is in effect, creditors cannot sue, assert a deficiency, repossess property, or otherwise try to collect from the debtor. Creditors cannot demand repayment from the debtor by mail, phone, or otherwise. Creditors who violate the stay can be required to pay actual and punitive damaged and attorney’s fees.” So, for those of you still attempting to pull the sue card for TomorrowWorld – you’re S.O.L.
Owing tens of millions of dollars to several companies, they officially filed for Chapter 11 bankruptcy on February 1st. A Chapter 11 is a form of bankruptcy that allows for the reorganization of SFX’s corporations and partnerships. It has no limits on the amount of debt. It is the usual choice for large businesses seeking to restructure their debt. This doesn’t mean that SFX is going belly-up. Filing for a Chapter 11 is pretty smart move in regards to keeping the company alive. This chapter of bankruptcy allows for the company to keep business as usual, while making agreements with some of their biggest debts and paying them off slowly. The stay allows for those little debts here and there to fall to the wayside, with SFX’s biggest debts on the negotiation table.
Fortunately for SFX and its affiliates, the electronic music industry and the larger-than-life festivals that come with it, are still a solid means of getting income while all the financial business gets sorted out. But, the festivals are kind of a gamble as the company’s sole means of getting that money back. The TomorrowWorld fiasco — where the weather and lack of preparation caused hundreds to be stranded in the middle of nowhere without a place to sleep or a ride back to Atlanta — could have greatly contributed to SFX needing to file for bankruptcy in the first place. Of course TomorrowWorld isn’t the only reason SFX is in its current financial situation, the way finances were handled at the company have been mediocre (at best) ever since taking up Beatport.
With SFX running such a huge corporation, it’s going to be an interesting series of events getting this company back to the top. We’ll be here to keep you informed. Listed below are some of the more known companies under SFX and it’s Chapter 11 bankruptcy case, some of whom claim that their everyday goings on will not be directly effected by the case at all:
SFX Netherlands Holdings