December 27, 2017
By Tom Hals
WILMINGTON, Del. (Reuters) – Creditors of American media entrepreneur Robert F.X. Sillerman are seeking to force the onetime billionaire into bankruptcy to try and collect on a $7.36 million judgment against him, according to court documents.
Two Chicago-based concert promoters on Wednesday filed an involuntary Chapter 7 bankruptcy petition against Sillerman in U.S. Bankruptcy Court in Manhattan.
They are seeking to collect a judgment they won last month against Sillerman over a promissory note he guaranteed on behalf of SFX Entertainment Inc.
Sillerman founded the company in 2012 to promote electronic dance music festivals, and in 2014 acquired React Presents Inc and Clubtix Inc from Jeffery Callahan and Lucas King. Part of the payment for the deal was in the form of a $10 million promissory note.
SFX Entertainment acquired festivals such as TomorrowWorld but had trouble bringing them together in one corporate family and filed for bankruptcy in February 2016. A month later, King and Callahan and the their two companies sued Sillerman in Chicago federal court to collect on the promissory note.
The creditors are represented by Michael Edelman of Vedder Price in New York, who did not immediately respond to a request for comment.
Sillerman could not be reached for comment.
Forbes Magazine in 2008 included Sillerman on its list of “poor billionaires,” or those who failed to crack the Forbes 400 list of richest Americans. He appeared on the list in 2005.
Sillerman built his fortune over decades of well-timed deals consolidating the entertainment industry, involving radio stations, concert promoters and even Elvis Presley’s Graceland mansion.
Sillerman can respond to the creditors’ involuntary bankruptcy petition by seeking to have the case dismissed or converting the filing to a voluntary bankruptcy, which would give him greater control over the case.
The involuntary bankruptcy is the latest legal headache facing Sillerman.
In September, ESFX Holdings LLC asked a New York state judge to issue an order permitting the forced sale of a property owned by Sillerman and his wife on the Upper East Side of Manhattan to satisfy a $14.6 million judgment.
ESFX obtained the judgment after a default on a promissory note that had been guaranteed by Sillerman.
Sillerman has asked the court to dismiss the case and said the filing was an attempt to pressure him by threatening him and his wife with the loss of their home.
A hearing is scheduled for March in the case.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Andrew Hay)