BANKRUPTCY / CRIMINAL LAW
Live events sector
The new management of SFX Entertainment – reported to be led by two senior creditors, investment firms Allianz and Axar Capital Management – have signalled their intention to bring charges against the company’s former directors, including ex-CEO Robert FX Sillerman. New documents, filed in the Delaware bankruptcy court, outline alternative post-bankruptcy plan for the dance music promotion group and says there may be a claim for damages for “breaches of fiduciary duty by former directors and officers of the debtors, and avoidance actions, such as fraudulent transfer claims under federal and state law”
SFX’s new management may also seek to recover “amounts reimbursed to Sillerman” during the bankruptcy process, as well as “licensing fees, employee compensation, a cash collateral release [and] certain settlement payments” and “the termination fee the company paid in connection with the termination of the merger agreement”, which relates to a failed 26 May 2015 merger between SFX Entertainment and two other companies forming part of Sillerman’s EDM empire, SFXE Acquisition LLC and SFXE Merger Sub, Inc.
The revised post-bankruptcy plan will go before US bankruptcy judge Mary F. Walrath for approval on 30 August. At the time of writing, Randy Phillips, the former CEO of AEG Live, is expected to be named chief executive of the new-look SFX.