Penthouse Global Media, the company behind the legendary adult magazine created five decades ago by Bob Guccione, has filed for Chapter 11 bankruptcy protection, according to court documents filed Thursday in federal court in California.
The filing represents the latest setback for the publisher, which has been struggling financially for years as the print advertising market has declined and the adult entertainment industry has migrated online.
In addition to putting out a monthly magazine, Penthouse oversees several adult cable and satellite channels that reach more than 100 countries. It also runs a licensing business for its intellectual property and iconic brand.
Chatsworth-based Penthouse Global Media was formed in 2016 when it was acquired by Chief Executive Kelly Holland in a management buyout from parent company FriendFinder Networks. The Florida-based online dating site had merged with the company in 2007 and explored the idea of shutting down the print magazine. FriendFinder itself filed for bankruptcy protection in 2013.
Penthouse didn't respond to a request for comment.
Thursday's filing in U.S Bankruptcy Court's Central District of California offered few details about the full extent of the company's debt. Penthouse listed estimated liabilities between $10 million and $50 million. Its top two creditors are the law firms Greenberg Traurig and Bayard P.A.
Penthouse took on debt during the 2016 management buyout, which was financed by ExWorks Capital, a Chicago investment firm, for an undisclosed amount.
"They're levered, and when you're levered sometimes small changes in your revenue stream can cause distress," said Adam Stein-Sapir, co-managing partner at Pioneer Funding Group, a New York-based investment firm that specializes in bankruptcy claims.
He said that Penthouse would most likely attempt to restructure its debt as it works toward emerging from Chapter 11. Other options include selling the company or liquidating assets.
During the last years of his life, Guccione faced mounting financial problems. His company General Media filed for bankruptcy protection in 2003, and the publishing mogul was later forced to sell personal property to repay debts. He died in 2010 at 79.
Penthouse's latest financial woes come at a time when rival Playboy Enterprises is also facing difficulties. The Wall Street Journal reported this month that Playboy is considering ending its print magazine, which was started more than six decades ago by Hugh Hefner, who died in September.