Penthouse Global Media Inc. is undertaking another bankruptcy, the third for the adult entertainment brand. The brand began with Bob Guccione’s Penthouse Magazine in 1965. Chapter 11 papers were filed in California court in mid-January.
Kelly Holland runs the brand’s current, Los Angeles-based owner. Before Holland’s bought it, the brand was owned by FriendFinder Networks Inc. and underwent a bankruptcy in 2013. Another bankruptcy happened in 2003.
The company falsified records and made misleading statements to hide financial losses in recent years, according to a lawsuit filed this week in California Superior Court, Bloomberg reports. Plaintiff Dream Media Corp. claims the company defaulted on loans to ExWorks Capital Fund. Dream Media Corp. now has the loans, and claims Penthouse Global Media owes it more than $10 million. Holland and a lawyer for the company didn’t return calls and emails for comment to Bloomberg.
Holland told the LA Times that Penthouse isn’t trying to compete with free online porn. “We need to offer distinct content that is different from the free stuff out there,” she said.