On Monday, June 23, 2014, magazine publisher and distributor Source Home Entertainment, LLC and its affiliate debtors (the “Debtors”) filed for chapter 11 protection in Delaware. The Bonita Springs, Florida company lists assets of $205 million and liabilities of $290 million. A copy of Source Home Entertainment’s bankruptcy petition is attached here (Voluntary Petition). A list of the top 35 creditors was filed with the petition.
Debtors offer the Declaration of Stephen Dube, Source Home Entertainment, LLC’s Chief Restructuring Officer and Senior Manager of FTI Consulting, Inc., in support of their first day motions. Attached here is the Declaration of Stephen Dube. According to the Dube Declaration, the Debtors are comprised of two primary units: (a) the distribution business, primarily operated by Source Interlink Distribution, LLC (“Source Distribution”) and (b) the retail checkout display manufacturing business (the “Retail Display Business”), which is primarily operated by Source Interlink Manufacturing LLC (“Source Manufacturing”).
According to Mr. Dube, the bankruptcy was caused, at least in part, by “the continuing fundamental technological shift away from traditional consumption of print media toward online magazines and e-book readers.” Debtors have reached an agreement with certain lenders to sell substantially all of Source Manufacturing’s assets and other assets related to the Retail Display Business owned by the Debtors, with the remainder of the Debtors’ assets to be administrated through a chapter 11 plan of liquidation.
The case has been assigned to Bankruptcy Judge Kevin Gross (lead case no. 14-11553-KG).