NEW YORK, Aug. 13, 2004 Legal news, law news, law firm news & research at LAWFUELPET Capital Partners LLC, an affiliate
of Marc Bell Capital Partners LLC and the holder, with its related entities,
of approximately 89% of the Senior Notes of General Media, Inc., the publisher
of Penthouse magazine (the “Company”), announced today the confirmation of a
Plan of Reorganization (the “Plan”) by the United States Bankruptcy Court for
the Southern District of New York.
The Plan results from discussions between the Company, PET Capital, the
Official Committee of Unsecured Creditors and the principal unsecured
creditors. Under the Plan, holders of the Company’s Senior Notes would
exchange them for 1 million shares of common stock of the reorganized company,
representing 100% of the new common equity, plus new Term Loan Notes of up to
$27 million. The new Term Loan Notes will bear interest at 13% per annum,
payable in kind for the first three years of their seven-year term, and be
secured by a first priority lien on all the reorganized company’s assets,
subordinate only to a lien granted to a lender under an exit financing
facility of up to $20 million. General unsecured creditors, whose claims
aggregate approximately $12 million, will share pro rata in $2 million in
cash, with the balance payable in new Term Loan Notes up to $10 million and,
under certain circumstances, an additional $1 million in principal amount of
new Term Loan Notes. General Media, Inc. is currently a 99.5% owned
subsidiary of Penthouse International, Inc. (OTC: PHSL.PK), which has not
filed for bankruptcy protection. No distribution on account of equity will be
made under the Plan.
“We believe the continued publication of Penthouse is now ensured for many
years,” commented Marc H. Bell, Managing Partner of Marc Bell Capital Partners
LLC. “This Plan of Reorganization will enable the Company to go forward as a
financially viable enterprise with a manageable debt load. It also represents
an important vote of confidence on the part of the major creditors, whose
support has enabled us to achieve this result.”
PET Capital estimates that it will consummate the Plan of Reorganization
and emerge from Chapter 11 by the end of August 2004.
A copy of the confirmed Plan of Reorganization is posted on the website of
the Bankruptcy Court, http://www.nysb.uscourts.gov.
This release contains statements relating to future results of the Company
that are “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those projected as a result of various risks and uncertainties.
Marc Bell Capital Partners is a private investment firm based in Boca
Raton, Florida. The firm invests in distressed assets and commercial real
estate in the form of acquisitions, recapitalizations, leveraged buyouts, debt
restructurings, special situation financing and Chapter 11 reorganizations
including debtor-in-possession and exit financing.