The decline of SFX continues as new challenges arise this week. After the company's share price crashed to $0.45 per share on September 10th, new controversy arose thanks to the New-York based law firm Abbey Spanier LLP.
Abbey Spanier has filed a class action suit (which they're known for) against the struggling corporation SFX Entertainment. The LLP is accusing them of “materially false and misleading statements” that founder Roger Sillerman made during the time period of February 25th and August 17th of this year when he bid to buy his company, SFX, back.
In this statement from Abbey Spanier lawyers, “Sillerman repeatedly affirmed his commitment to acquire SFX. However, he knew or recklessly disregarded and failed to disclose that he did not have any financing in place at the time he made his proposal, and knew or recklessly disregarded that he could not obtain the financing to consummate the transaction.” They add: “Given the company's growing debt and decreasing margins it was not feasible that Sillerman was ever going to buy the company and, with the aid of the other defendants, Sillerman initiated and maintained a sham process designed to lure third party offers, in an attempt to shed his failing investment before the truth about the deterioration of the company could no longer be concealed.”
Some suspect that Sillerman will be gone by the end of the year, as rumors have been floating around for some time that he's on the verge. After failing to meet his “Go-private” deadline in August, it seemed like few alternatives remained at bay for SFX. The company still owns React Presents, Made Eventts, i-Motion, and Beatport.
Stay tuned for more details.