The fall of controversial SFX founder and former CEO Robert “FX” Sillerman has been as dramatic as his rise. The next chapter in his demise is likely to include a gaggle of lawyers, as the new group in control of SFX signals legal action against him.
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New documents filed in Delaware bankruptcy court this week outline a restructuring plan that would bring EDM promotion company SFX out of bankruptcy. Included in the filings is the option to seek damages for “breaches of fiduciary duty by former directors and officers of the debtors, and avoidance actions, such as fraudulent transfer claims under federal and state law”. The filings also refer to concerns over “insider transactions and funding issues” as well as Sillerman’s failed promises to take the company private.
Former SFX General Counsel Howard Tytel and Vice Chairman Mitch Slater are also believed to be among those that the new SFX management team is considering action against.
Crotch grabbing, middle finger pointing SFX founder and CEO Sillerman was controversial as the head of Clear Channel Concerts (now Live Nation) and his “screw you” attitude only become more pronounced as he rolled up the world of EDM into this now failed conglomerate.
In March, SFX announced that he would resign within 60 days as CEO, but remain Chairman of the board. The resignation was a condition of investors and bondholders who had agreed to write off more than $300 million as part of a Chapter 11 Bankruptcy petition, which has now been withdrawn.