SFX Sells Fame House To UMG

U.S. Bankruptcy Judge Mary Walrath approved the transaction May 26, paving the way for UMG to pay SFX $1 million for Fame House and take on about $400,000 in debts and liabilities.

UMG was the sole bidder in the auction, according to Adam Kiel, managing director of Moelis & Company, which is assisting SFX with the chapter 11 filing.

Fame House was founded in 2011 and boasts an impressive list of clients that include Ice Cube, Pearl Jam, Eminem and Tiesto. In October 2013, SFX purchased Fame House to serve as the in-house marketer for events like TomorrowWorld and Electric Zoo.

The agency, led by founder and CEO Michael Feibach, was one of the first assets SFX would try to unload after filing for Chapter 11 bankruptcy protection in February 2016.

“After evaluating its assets, the Debtors no longer viewed the Fame House business as core to the SFX platform nor sustainable long-term under SFX’s ownership,” Keil wrote in a briefing to the court.

Keil is also helping SFX sell ticketing firm Flavorus, but the auction and bid deadline has been pushed back a number of times. Walrath also approved a settlement between SFX and Dutch promoter Alda

. When SFX defaulted on a scheduled $10.4 million payment to Alda owners David Frederick Marinus Lewis and Allan Johan Hardenberg earlier this year, the pair won a judgment in Dutch court allowing them to seize a number of SFX’s European properties and take over several bank accounts in the Netherlands belonging to SFX.

SFX eventually reached a compromise with Alda for the return of SFX’s European holdings and its Dutch bank accounts.

In exchange, SFX would sell Lewis and Hardenberg their company back for $1 and agreed to pay the two Dutch promoters $1.2 million for their troubles.

Worried that other promoters engulfed in the bankruptcy would find out about the agreement, attorneys for SFX attempted to file a sealed version of the settlement with the bankruptcy court.

An objection was quickly raised by U.S. Trustee Andrew Vara with the Department of Justice, arguing that settlement agreements that arise out of bankruptcy court are public documents and cannot be sealed. Attorneys for SFX eventually relented and made the settlement terms public.