Penthouse Global Media, which landed porn star Stormy Daniels in its latest issue, is heading to a bankruptcy auction next month with the company that is trying to buy High Times magazine submitting a “stalking horse” bid to become its new owner.
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” of several thousand dollars.
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.
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.