On The Ziff Davis Bankruptcy - OR- What Happens Now To EGM & 1UP
Posted on Friday, March 7 @ 22:02:02 Eastern by Duke_FerrisToday was unfortunately another paperwork day and I spent all my hours filling in forms and adding up numbers. So I thought i might shed some light on another interesting boring topic: Bankruptcy.
I know a thing or two about it, as our ex-parent corporation went bankrupt back in August 2007.
Really the amazing thing about this story is that in 2000 at the height of the internet boom, SoftBank and Willis Stein did a fantastically complex leveraged buyout of Ziff-Davis for 2.1 BILLION dollars. That's right, $2,100,000,000.00.
Now it's bankrupt.
That doesn't mean it will just go away though. There's a lot of value left in what Ziff owns, the problem was they couldn't make their debt payments. Also, Ziff Davis Media is a separate company that is wholly owned By Ziff Davis Holdings. Add to that the complication that sites like 1UP are owned by a third company called Ziff Davis Publishing Holdings, Inc.
At this point, you should be thinking what I'm thinking: what a fucking mess. And you'd be right.
A chapter 11 bankruptcy is a "reorganization" that is presided over by a judge whose duty is to satisfy the creditors, ie. Ziff-Davis owes a lot of people money (hundreds of millions) and the justice has to make them happy.
The major creditors have already accepted a deal. They are owed $225 million, but they will reduce that to $57.5 million in exchange for %88.8 percent of the stock in the new company set up by the judge.
The smaller people they owe money to are called "unsecured noteholders" and they're still pissed. They don't want stock, they want their damn money.
To pay them, the judge will probably sell off some of Ziff's assets and then pay what he or she determines to be a fair percentage of the money owed.
So who knows? EGM, 1UP and PC Magazine might be coming up for sale. But they won't be going away.
Actually I spent the whole day playing video games with hot strippers.
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