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Penthouse comes unstuck

Agencies
Wednesday August 13, 2003

The publisher of troubled Penthouse magazine filed for bankruptcy yesterday, possibly spelling an end to the top-shelf title founded 38 years ago by the flamboyant Bob Guccione.

Mr Guccione's General Media Inc - the publisher of Penthouse - filed for Chapter 11 protection at US bankruptcy court in Manhattan, looking to restructure its debt and operations. General Media is the lead debtor on $39.9m (?24.9m) in outstanding senior secured notes.

That debt totalled $85m two years ago when it was restructured. But the resulting quarterly interest and principal payments turned out to be too severe for the company to bear.

"The bond payments really choked off the company," General Media lawyer Rob Feinstein said yesterday. This filing is "all about debt relief". In its bankruptcy petition, General Media said it had between $50m and $100m in both assets and debts. The document was not more specific.

General Media is 99.5% owned by Penthouse International Inc, which did not file for bankruptcy. Eight other Penthouse entities did file, however.

The publishing schedule of its flagship Penthouse magazine has fallen behind. The August issue is late - currently scheduled to hit newsstands on August 19, although industry practice is for a particular month's issue to be published before the month listed on the cover.

Over past months, Penthouse has struggled to meet printing costs.

Penthouse's circulation has dropped dramatically - down from a peak of 5 million copies to just 530,000 in December. Arch competitor Playboy has a circulation of 3.2 million.

General Media's revenues have halved, from $101m in 1998 to $53.8m last year.

General Media also named T Scott Avila, a managing partner of Corporate Revitalization Partners LLC, as chief restructuring officer, and said it got $5m in financing from some of its secured bondholders.

No chance of Caligula 2 ..then

Yes Its true about Penthouse Magazine filing for Bankrupty,Funny enough i sort of knew about there troubles from last year from my American Cousin who works in the adult industry himself and he told me about there problems there were having.But you are right there had problems way before that.( i think there filed bankrupty in New York).

What makes me laugh from people everybody says everything fine in the porn industry(bollocks,I don't care what people think about me,the market is i think quite stale,and i never seen the industry changed so much in the last 4 years i've been doing this)Actually quite a few of the photographers and producers might agree with me on this.

Carl

Guccione is a cunt, plain and simple. He borrowed millions to keep Penthouse going when subscribers/readers starting to fall below the required sell target to make a profit. He should have called it a day and relaunched a few years later instead of flogging a dead horse. Always sad when a name goes under, but in Bob's case, I'll make an exception.