According to the Wall Street Journal, the bankruptcy case handling SFX Entertainment’s BK filing has approved a plan to wipeout approximately $400 million in debt. In addition, the bankruptcy judge did not approve a motion for the original investors to be a part of the post-bankruptcy SFX meaning those investors have lost 100% of their investments.
Embattled CEO Robert Sillerman is still on the hook as the bankruptcy plan calls for the formation of a litigation trust to pursue civil action against the company founder.
Possible Causes of Action against Mr. Sillerman include claims for breach of fiduciary duty, breach of contract, negligent misrepresentation and fraud,” the bankruptcy agreement reads. “In addition, the Debtors claims include claims against and arising from agreements with entities affiliated with Mr. Sillerman, including, for breach of contract, negligent misrepresentation, and fraud.”
In other recent SFX news, former AEG Live chief executive Randy Phillips confirmed as the new CEO and President.