Financially troubled company rechristened as Spin Media Group in reorganization
SpinMedia has undergone yet another transformation, after entering a liquidation that will have the company operating under a slightly different name.
According to papers obtained by TheWrap, SpinMedia — previously known as BuzzMedia, before that company acquired Spin Magazine in 2012 — is no more, with a new company, dubbed Spin Media Group Inc., taking over operations after the company.
The change-over took place after SpinMedia went into default with its secured lender, Silicon Valley Bank — to which SpinMedia owed more than $12 million — and was unable to find another suitable buyer.
According to a bulletin obtained by TheWrap, SpinMedia had pledged “substantially all of its assets as collateral” to Silicon Valley Bank.
The liquidation took place via a General Assignment, which is an alternative to filing Chapter 7 bankruptcy in California.
The bulletin, dated Feb. 28, says that the newly formed Spin Media Group negotiated to purchase “substantially all of Spin's tangible and intangible assets” for $7,002,428.98 in cash, $774,537 in current employee wages and benefits, and “the assumption of approximately $815,259 in accrued vacation pay and commissions.”
Spin has not yet responded to TheWrap's request for comment.
The new company, which has at least four shareholders who were also minority shareholders and officers of Spin, “has rehired nearly all of Spin's former employees, including its senior management.”
Investors in the company through its various permutations, meanwhile, appear to be out of luck. According to the New York Post, the liquidation and reorganization erases $125 million in equity that venture firms have poured into the company. While some investors are re-upping to invest in the new company — and a new investor, TDF Venture Partners — has come aboard, former backer Red Point Ventures has declined to throw more money into the company, the Post said.
Spin, whose websites include Celebuzz, the Superficial, Buzznet and Idolator, has encountered difficult economic times — the bulletin notes that the company reported “significant operating losses” in recent years. In October, laying off a significant portion of its workforce, including then-editorial director A.J. Daulerio, a slashing that followed the layoffs of 50 staffers in February 2013.