Tuesday, February 10, 2009

No More Elevator Music, Muzak Files For Bankruptcy

Muzak, which somehow made money for decades, selling elevator music to.... elevators, and which over the past 4 years was on life support, pulled the plug today and filed for bankruptcy. The filing (09-10422, Delaware), listed over $500 million in debt and less than $50,000 in assets. Funny how that works - one day that ratio of liabilities to assets may be applicable to the U.S. as well. Anyway, it is unclear (and to be honest we were too lazy to check) if the company obtained a DIP, or whether existing lenders simply rolled existing secured interests into a priming DIP. As the company disclosed in the bankruptcy filing:

Muzak and its major creditor constituencies are committed to building upon the momentum gained over the past 22 days in an effort to continue, and ultimately complete,restructuring negotiations, which can be implemented on an expedited basis in Chapter 11.
22 days of momentum seems quite spectacular and we are all rooting that it continues for at least another 22 days before the company has to liquidate its 50,000 in assets.

And before still employed restructuring bankers start screaming for pitch books, the company has been already working with bonvivant Thane Carlston of Moelis as financial advisor and Kirkland and Ellis as legal counsel since December 19.
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