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SFX Punts Restructure Deal
SFX Entertainment said in February it expected to emerge from its Chapter 11 bankruptcy within six months. That prediction appears in danger with the company’s June 17 notice to a Delaware court that it has terminated its restructuring support agreement, or RSA.
The RSA was supported by bondholders and expected to help fast-track SFX out of bankruptcy – and eliminate $300 million in debt to boot, according the Wall Street Journal. The termination of the RSA gives SFX “the flexibility for more comprehensive negotiations with all of its constituents with the goal of developing a consensual Plan of Reorganization,” the company said.
The original plan called for a debt-for-equity swap with bondholders that would help pay for the bankruptcy, to the tune of $115 million in financing. It also called for the termination and replacement of CEO Robert Sillerman, who resigned from that position March 31 but remains chairman of the board. Apparently, despite the disintegration of the RSA, the bondholders backing the effort continue to work with SFX and the committee representing unsecured creditors, at least according to SFX.