Former SFX chairman Bob Sillerman’s personal bankruptcy proceeding stemming from a judgement from React Presents is getting the attention of his many creditors and legal adversaries who are filing notices of appearances during the insolvency proceedings.
In the last week, representatives from the Guevoura hedge fund, which has a securities class action suit against Sillerman, along with Deutsche Bank and a pair of Florida-based investors have all filed notifications with the New York Federal Bankruptcy court overseeing the case, indicating plans to file a claim against Sillerman as he goes through bankruptcy. They are joined by the Eric D. Madden, a litigation trustee for Sillerman’s former company, who has been building a case against their former CEO and Chairman.
Also expected to file notices with the court in coming days are a Long Island real estate firm that accuses Sillerman of cutting them out of a $114 million real estate deal, former SFX business partner Mitch Slater, credit card company American Express, a private jet leasing company, Mass Mutual bank and several different classes of investors who hold promissory notes for his publicly-traded clickbait firm Function(X), which also appears to be on the verge of bankruptcy. In total, 31 companies, individuals and institutions are believed to be eligible to file a claim against Sillerman.
For his part, Sillerman has moved to exercise greater control over the bankruptcy proceedings after Mary Kay Vyskocil, the judge overseeing the case, signed an order allowing Sillerman to convert the involuntary Chapter 7 bankruptcy into a Chapter 11 bankruptcy, which allows him to continue to operate while the proceedings take place. The bankruptcy proceedings began in December when lawyers for React Presents’ Lucas King and Jeffrey Callahan asked a federal bankruptcy judge to push Sillerman into Chapter 7 bankruptcy over an unpaid $7.4 million promissory note after the pair won a judgment against Sillerman. According to court filings, React Presents cofounders are still owned millions following the 2014 sale of the Chicago based dance promotion company to SFX. In 2016, Sillerman pushed SFX into bankruptcy and was eventually kicked out of the company by its senior creditors, who hired entertainment executive Randy Phillips to take the helm and rename the company LiveStyle.
Sillerman’s personal bankruptcy will likely spell the end for his click-bait company — in an 8K filing dated Feb. 9, Sillerman warns that he has “historically provided financial support to the Company in form of cash and guarantees of Company’s obligations” but due to the circumstances surrounding bankruptcy, he is “unable to provide financial support to the Company in the foreseeable future” and warned “there are no assurances the Company will be able to secure an alternative source of funding.”