(MENAFN - AFP) The publisher of Penthouse magazine said Tuesday it filed for bankruptcy, seeking approval of a deal with most creditors to eliminate some 300 million in debt.
California-based FriendFinder Networks Inc. said it reached an agreement with key stakeholders on the plan, which would return control of the company to its founders.
Besides publishing Penthouse, FriendFinder Networks operates a number of adult-oriented social networking sites including AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com and SeniorFriendFinder.com.
The company lost 49.4 million last year, and 10.3 million in the past quarter.
The group said holders of most of the secured debt agreed to the plan, which is subject to approval by the bankruptcy court in Delaware.
The plan would convert some of the debt to new common stock, and the existing shares would be canceled. The plan is expected to reduce annual interest expense by over 50 million, and eliminate approximately 300 million of secured debt, FFN said.
"The Chapter 11 filing is the most efficient and cost-effective way for the company to implement the transaction support agreement while continuing to operate our business," chief executive Anthony Previte said.
"All operations will continue as normal throughout this process. Importantly, nothing about the user experience is going to change and we anticipate that all of our affiliates will continue to be paid in the ordinary course of business during the Chapter 11 process."
Bob Guccione began publication of Penthouse in Britain in 1965 and four years later in the United States, earning him a fortune estimated at 400 million at one point with the smuttier alternative to Hugh Hefner's Playboy.
But as the Internet become dominant in porn, Penthouse publisher General Media Inc., which was 85 percent owned by Guccione, filed for bankruptcy in 2003, which led to its acquisition by FriendFinder Networks.
Guccione died in 2010 after a battle with cancer.