Scout Media Files for Chapter 11 Bankruptcy

by San Antonio Attorney

Scout Media Inc., a U.S. digital media company, filed for Chapter 11 bankruptcy with the intention to sell what is left of the network at an auction in January.

On Dec. 9, the company asked permission from a bankruptcy judge to give it direct access to a $6.2 million sponsorship from Multiplier Capital LP.  Scout Media needs new funds to continue operating, the company lawyers said.

The reasons for its filing are financial problems and sudden resignation of its CEO, the court filings show.  The struggling business had no option but to try to sell the company as soon as possible.

Scout Media has been considering selling itself since September, but no official offers have been submitted, as stated in court filings.  The company hired a consultant and reached out to 154 prospect buyers, of which twenty have showed interest but the company did not receive any offers.

In the middle of the selling process, a group of creditors tried to force the company in to bankruptcy.   One of them is LSC Communications Inc., which claimed that it is owed $672,000 for the services it provided for the company.

Scout Media’s lawyer proposes a court-supervised auction process in which bids for the company assets would be submitted by Jan. 17.  An auction is slated on Jan. 19 to be conducted in Wilmington, Delaware.  The sale process will be overseen by U.S. Bankruptcy Judge Michael Wiles.

After the auction, the Scout Media says it is going to wind down.  The money generated from the sale will be used to pay back creditors.  The company stated assets and debts from $10 million to $50 million.

Scout Media was bought by private equity firm Pilot Group from Fox Sports in 2013.

The sports media titles mainly target men and include a variety of topics like fishing, hunting, football, fantasy sports, athletic recruiting, and other sports.

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