Penthouse writer FriendFinder records for bankruptcy. Perhaps gender doesn’t offer that well after all

(Reuters) – perhaps sex does not promote that better most likely.

FriendFinder networking sites Inc FFNT.PK , writer of Penthouse mag and various adult-entertainment internet sites, registered for section 11 case of bankruptcy on Tuesday.

The company, which needed to mix social media and intercourse, mentioned they have hit a deal with noteholders that can lower the debt by $300 million if approved by the U.S. case of bankruptcy legal in Delaware.

According to the arrange, one set of noteholders will need control associated with sex recreation business, which traces the root towards belated Penthouse publisher Bob Guccione. As well as typical in personal bankruptcy, shareholders will likely be remaining with little.

Control over the company would visit Andrew Conru and Lars Mapstead, two noteholders exactly who marketed different social networking sites to FriendFinder in 2007.

Through a network of a large number of internet sites, FriendFinder produces real time movie, chatrooms, and image and video posting. What’s more, it sought to touch the influence of social network with web pages for example adultfriendfinder, which marketed casual intercourse, and bigchurch, which directed for religious connectivity.

The company and its associates constitute a global community greater than 8,000 internet sites with 220 million users and 750,000 readers, based on court papers.

But while Facebook FB.O , LinkedIn LNKD.N and other social web sites posses boomed, FriendFinder’s limped. The sales around finished June 30 totaled $293.70 million, down 10 percent from earlier year.

Hardest hit had been the business’s networks, where earnings dropped 17.6 per cent, relating to court filings. The that fall ended up being counterbalance by a 7.8 percent boost in live interactive video clip sales.

Ezra Shashoua, the firm’s primary monetary policeman, attributed the reduced revenue on a fall in membership and increasing marketing and advertising charges for affiliates, based on court documents. want casual sex dating Shashoua also mentioned credit card companies had would not procedure purchases for any organization’s online enterprises. No reason at all was given.

FriendFinder hasn’t turned-in a net income since no less than 2008, based on Thomson Reuters information.

The business had been established by Marc Bell and Daniel Staton in 2003 when they acquired of bankruptcy proceeding the publisher of Penthouse, Guccione’s racier opponent to Playboy. In 2007 the company bought numerous Inc and its own dating web pages from Conru and Mapstead for $400 million.

A year later it registered with regulators to boost $460 million in an initial community providing, nevertheless when they finally finished the IPO last year, FriendFinder lifted only $46 million.

In 2010 the firm accessible to pick competing Playboy companies Inc for $210 million. The offer dropped by.

FriendFinder stated in U.S. personal bankruptcy judge reports it intends to issue finances and new personal debt to holders of $234 million of first-lien records. It intends to terminate about $330 million in second-lien records and issue new stock to the people debtholders, who’ll posses the organization when it exits case of bankruptcy in the event that plan gets collector and legal acceptance.

FriendFinder stated the plan ended up being supported by 80 percentage of its noteholders but have not but been place to a collector vote.

Bell and Staton, just who reconciled their particular executive positions utilizing the company last year, each consented to a $500,000 earnings cost to end their own consulting contracts aided by the company, per court documents.

Earlier this current year, LodgeNet involved, which given xxx movies and game titles to accommodations in addition to their visitors, registered for personal bankruptcy, partly because of online competitors.

The FriendFinder circumstances was PMGI Holdings Inc, instance No. 13-12404, U.S. bankruptcy proceeding courtroom, District of Delaware.

Reporting by Sakthi Prasad in Bangalore; Editing by tag Potter, Louise Heavens and John Wallace