FriendFinder Networks filed for bankruptcy under Chapter 11. FriendFinder is the publisher of Penthouse, an adult magazine and runs Internet site adultfriendfinder.com. A court filing showed that the company was struggling to pay its loans, hence the bankruptcy filing.
The filing showed that FriendFinder had liabilities of around USD 500 million to USD 1 billion. Its assets were pegged at less than USD 10 million. The filing further revealed that for the fiscal quarter that ended in June this year, the publisher only had revenues of USD 293.70 million. Data from Thomson Reuters showed that FriendFinder did not have a net profit starting 2008.
In the filing, Friend Finder said, "Despite continuing member interest and high volume traffic, the debtors did not make certain payments to the holders of existing first lien notes and cash pay second lien notes which constituted a default under their respective indentures." FriendFinder added that it would restructure its balance sheet. It had already agreed with its senior debt holders to do so.
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