Penthouse Bankruptcy Auction Results in New Ownership

WOODLAND HILLS, Calif.—At noon yesterday, June 4, a group of representatives from various adult-oriented companies gathered at the U.S. Bankruptcy Court at 21041 Burbank Blvd. in Woodland Hills to bid on the assets of Penthouse Global Media, Inc., including its magazines, its broadcasting channels, its films and various licensing agreements. While several of the bidders were seeking ownership of only some of Penthouse's assets, three bidders bid for the entire company: adult content conglomerate MindGeek; WGCZ Holding, owner of the Czech-based adult video clip host XVideos; and John Kirkendoll, who has the master club license for the Penthouse Clubs. WGCZ Holding placed the final winning bid, which was $11.2 million for the entirety of Penthouse's assets. It is unclear whether that amount exceeds the amount of Penthouse's liabilities to its original lender and/or other potential liabilities connected to a civil suit it was fighting against a former company official, but due to the nature of the bankruptcy process, those debts are no longer owed by Penthouse itself. It is expected that WGCZ Holding's bid, which was accepted by Bankruptcy Court Judge Martin R. Barash at the completion of the auction, will take approximately ten days to finalize, and it is unclear whether WGCZ Holding itself will be the named owner, or possibly a different corporation formed by WGCZ Holding's principals. MindGeek's Scott Justice was present throughout the auction, and bid up to $11.1 million for the company, but reportedly left the auction when WGCZ Holding placed its winning bid. AVN has reached out to MindGeek for a comment, but none had been received at press time. What is unclear at this point is what role Penthouse's former owner and CEO Kelly Holland will have at the reformed company. She is expected to help WGCZ Holding's personnel with introductions to Penthouse's various business partners, licensees and others, and indicated to AVN that she is happy with how the auction went. "I am thrilled with the outcome of the court-approved auction yesterday," she told AVN. "For the first time in 20 years, Penthouse has the opportunity to operate debt free and to focus on growing and expanding the iconic Penthouse brand worldwide."