Digital sports network Scout Media Inc. filed for chapter 11 protection with plans to sell what remains of the business at an auction next month.
The sports media company asked a bankruptcy judge on December 16 for immediate access to a $6.2 million lifeline from Multiplier Capital LP. Without the new financing, lawyers for the company said in court papers that it would be forced to cease its operations.
According to court papers filed Friday with the U.S. Bankruptcy Court in Manhattan, a “perfect storm of an unsustainable balance sheet” as well as financial pressures caused by the abrupt departure of the company’s chief executive left the ailing business with no choice but to try to place its assets in the hands of a new owner as quickly as possible.
Scout Media has been exploring the possibility of a sale since September, court papers show, but no formal offers have materialized. With the help of a consultant, the company contacted 154 potential buyers, of which 20 have expressed interest but haven’t put forward bids.
Amid the marketing process, a group of creditors sought to push Scout Media into bankruptcy. LSC Communications Inc., which says it is owed a judgment for $672,000 for unpaid printing services, and two vendors joined in signing the petition.
Photo courtesy Scout Media
