UPDATE: Representatives on behalf of SFX Entertainment have informed us that while the full details of the company’s settlement proposal are not yet available to the public, if it goes through SFX will retain ownership of SFX Europe, ID&T and Sensation Brazil – although its shares in Alda Events will be transferred its original co-shareholders. The settlement is subject to approval by the US Bankruptcy Court, which is expected to hear the motion for approval later this month.
ORIGINAL STORY: Nobody expected those wronged by EDM conglomerate SFX Entertainment to pull any punches just because the company is in the middle of chapter 11 bankruptcy restructuring, but the latest developments sure add insult to injury anyways. As a means of collecting a delinquent debt, Dutch promotional company Alda Events has seized commanding shares of SFX Europe, ID&T and Sensation Brazil.
Last month, rumors of ID&T’s relaunch in the Netherlands suggested that SFX would soon relinquish ownership of the company – but not as a result of the same auction process carried out for assets like Beatport, Flavorus and Fame House. However, only close insiders could have imagined that SFX would begrudgingly lose the brand to another one of the companies it had originally sought to acquire.
Bankruptcy court documents uncovered by Dutch magazine Quote reveal that SFX Entertainment had originally agreed to purchase 50% of Alda Events from its owners, Allan Hardberg and David Lewis, for $23.4 million. Once SFX breached contract due to nonpayment, Hardberg and Lewis exercised a put option at a previously agreed-upon amount of shares.
SFX tried to propose other alternatives since such a course of action would provide additional setbacks in the company’s pursuit of financial solvency, but Hardberg and Lewis have reportedly moved forward and seized commanding shares of SFX Europe, ID&T, and Sensation Brazil – as well as the shares of Alda Events already transferred to SFX.
Dealing a further blow to SFX’s cash flows, Hardberg and Lewis have also repossessed business accounts that SFX had opened with Deutsche Bank Netherlands, ING, Rabobank and ABN Amro.
SFX Entertainment is trying to avoid arbitration with Hardberg and Lewis to minimize costs, and has proposed a settlement to the bankruptcy court – the details of which have yet to be disclosed. As more official documents emerge from the proceedings, the full impacts of Alda Events’ seizure of the company’s assets on its restructuring process will become more clear.
