The parent company of Penthouse magazine has been sold at auction for $11.2 million, five months after the adult entertainment brand filed for Chapter 11 bankruptcy protection in a federal court in California.
Penthouse Global Media is being taken over by the Czech porn site operator WGCZ Ltd., the entity behind such popular adult sites as Xvideos.com and Bangbros.com. The deal is expected to be finalized this month.
The June 4 auction had an opening bid of $3 million and saw offers from prominent adult entertainment brands including Pornhub, which is owned by MindGeek, and Larry Flynt’s Hustler.
“Some were bidding for the entire thing, and some were bidding for pieces,” said Hamid Rafatjoo, an attorney at Raines Feldman, who represented the unsecured creditors committee.
The sale to WGCZ is for the entire company, he said.
It remains unclear if Kelly Holland — the chief executive of Penthouse who formed the company in 2016 in a management buyout from its previous owner — will stay on with the company after the deal closes. Holland didn’t respond to requests for comment.
Penthouse said in its auction notice that it has 30 employees and gross annual revenue of approximately $10 million.
Assets listed in the notice include content from more than 50 years of print publishing as well as trademarks and licensing agreements. The company also oversees several adult cable and satellite channels that account for about half of its revenue.
In addition, Penthouse has a film catalog with more than 1,200 titles, including the infamous 1980 movie “Caligula.”
Chatsworth-based Penthouse said in its bankruptcy filing in January that it had liabilities of between $10 million and $50 million. The company took on about $10 million in debt during the 2016 management buyout, which was financed by ExWorks Capital, a Chicago investment firm.
That debt was later acquired by a firm called Dream Media.
The Penthouse sale is the latest financial turn for the legendary publisher, which like other legacy adult media companies has been struggling with declining ad revenue and the ubiquity of free online amateur porn.
Before the 2016 management buyout, Penthouse was owned by FriendFinder Networks, the Florida-based online dating site that had merged with the publisher in 2007 and explored the idea of shutting down the print magazine. FriendFinder itself filed for bankruptcy protection in 2013.
Launched in 1965 by Bob Guccione, Penthouse was seen as a more explicit rival to Playboy and became a cultural icon in its own right, publishing explicit photos and long-form journalism.