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Troika Media Group Enters Strategic Chapter 11 Filing and Sale to Blue Torch

December 07, 2023, 07:30 AM
Filed Under: Media

Troika Media Group, a consumer engagement and customer acquisition group, entered into a restructuring support agreement with certain funds managed by Blue Torch Finance, the Company's senior secured lenders, pursuant to which Blue Torch would acquire substantially all of the assets of the Company via a stalking horse credit bid.

To facilitate the acquisition and the restructuring of the Company's balance sheet, the Company and certain of its affiliates have filed voluntary petitions for relief under chapter 11 in the United States Bankruptcy Court for the Southern District of New York. The Company is seeking approval of the proposed stalking horse credit bid pursuant to section 363 of the United States Bankruptcy Code.  The stalking horse credit bid will be subject to competing bids via a court-supervised auction to ensure the highest or best possible price for the Company's business.

The Company's secured lenders are supportive of the transaction and have committed to provide $11 million of debtor-in-possession financing. The Company anticipates that this financing, as well as cash generated from ongoing operations, will be more than sufficient to fund its business operations through the sale process, which it expects to conclude within the next few months.

Grant Lyon, Interim Chief Executive Officer of Troika stated that "We expect that the process will be relatively short and that the Company will have adequate liquidity to operate the Converge business normally throughout the process.  We anticipate that the Company will emerge from Chapter 11 as a private company with a stronger balance sheet and with Michael Carrano and Maarten Terry, two long term leaders of the Converge business, in leadership roles."

The Company has filed a number of customary first-day motions with the Bankruptcy Court seeking authorization to support its operations during the court-supervised sale process, including the continued payment of employee wages and benefits without interruption and continued payments to key vendors and suppliers for goods and services. The Company expects the Bankruptcy Court to approve these requests, which should minimize the impact of the sale process on the Company's customers, employees, and other key stakeholders.

Willkie Farr & Gallagher LLP is serving as the Company's legal counsel. Jefferies LLC and Areté Capital Partners are serving as the Company's investment banker and financial adviser, respectively.

King & Spalding LLP and Ankura Consulting Group, LLC are serving as legal counsel and financial advisor, respectively, to Blue Torch as collateral agent and administrative agent and to its affiliated secured lenders.

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