Penthouse may be bought by High Times suitor
Adam Levin, whose Oreva Capital agreed to buy High Times in mid-2017, formed a company called Dream Media Corp., which took over a secured 2-year-old, $10 million loan to Penthouse that was in default. It is believed there are several other potential suitors. Levin’s bid is said to come in at $3 million at auction, sources said.
Beth Young, an attorney for Dream Media, confirmed that “they did buy the loan” from ExWorks Capital, but she declined to answer further questions.
Under terms of the bankruptcy asset purchase agreement, any bidder who wants to top Dream Media’s bid must pony up $3.1 million to stay in the game. The auction is set for June 4.
Penthouse filed for a reorganization under terms of Chapter 11 in January, which would have allowed it to continue to operate under the current ownership, headed by CEO Kelly Holland. Holland said that Stormy Daniels posed for “the standard modeling fee.” Another source close to the situation said that the exact payment was $2,000.
The court-appointed bankruptcy trustee, David Gottlieb, said last month that the company was insolvent and was expected to lose $732,000 over the next three months.
When Holland, who was active in producing adult movies, took over the assets in 2016, she was paying a 23 percent interest rate for a $9 million loan from ExWork Capital, sources close to the situation said. The lender eventually received about $5.3 million before the loan went into default and the sky-high interest rate pushed the loan amount to over $10 million.
In court filings, the company listed its debt levels as unsecured creditors of only $128,553 but a secured creditor of $10.3 million.
Levin could not be reached for comment, but Oreva Capital, his Los Angeles-based venture firm, last year bought out Here Media, which operated LGBT brands, including The Advocate, Pride, Plus, Out Traveler and LBGT.com.
In December 2017, Levin’s Oreva said it was purchasing High Times from a family trust that controlled it for a reported $70 million through Origo Acquisition Corp., a so-called special purchase acquisition corporation — also known as a blank check corporation. But SEC filings said the deal was not finalized and the company is now fighting a move by NASDAQ to delist its stock.
Current Penthouse CEO Holland had purchased the assets from Friend Finder Networks Inc., which had filed for bankruptcy in 2013. The 53-year-old magazine was founded by Bob Guccione Sr., who lost control of his media empire and extravagant Manhattan townhouse before he died in 2010.