The petition asked that the court set a date of Dec. 5 for a hearing to approve the sale of Frontiers for $361,000. Others interested in acquiring Frontiers must make a bid by then that is at least $10,000 higher.
Levin, who is based in Los Angeles, has invested in varied media and other businesses. Bebo, launched in 2005, was purchased by AOL for more than $850 million in 2008 in what later was described as “one of the worst deals ever made in the dotcom era.” AOL sold Bebo in 2010 to Levin’s Criterion Capital Partners for $10 million. Levin was quoted at the time as saying “the young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform.” Under Levin’s management, the site suffered from technical difficulties and filed for bankruptcy. In May Levin sold it back to its founders for $1 million.
Levin was not popular with other Bebo shareholders. Bebo founders Michael and Xochi Birch, Ron Conway’s SV Angel investment vehicle, TV executive Michael Jackson and entrepreneur Richard Hecker sued him, alleging financial fraud and misappropriation of investment capital. Among other things, they accused Levin of improperly using their investment to pay himself a $14,000 monthly salary and defaulting on the company’s San Francisco office lease.
Another venture of Criterion, which described itself as a turnaround specialist, was creating SeeSaw, a UK TV show aggregator, which collapsed in 2011 when another prospective investor, Weston Capital Management, failed to join in providing the investment funds needed. Levin and Dan Adler, an entertainment industry figure, also bought the financially troubled Beitar Jerusalem football club. After a dispute with the club’s owner they decided not to close on the deal. And in 2011, Criterion acquired 10 Fatburger restaurant franchises in Southern California.
In an acquisition reminiscent of that of Bebo, Levin’s separately organized Vert Capital last year acquired for an undisclosed sum Poolworks, the company that owned StudiVZ, described as a German version of Facebook. StudiVZ had been acquired by Holtzbrinck Ventures for roughly $110 million in 2007 before going into such a sharp decline that Holtzbrinck had great difficulty finding a buyer.
The proposed purchase of Frontiers is being organized by Noble Media Ventures, a firm that sets up so-called “special purpose entities” to acquire ailing companies with investments from others. It is not clear what other investors Noble may be approaching.
Frontiers, the largest circulation gay magazine in Southern California, filed for Chapter 11 bankruptcy protection last March, citing $3.2 million in debt and only $58,000 in cash on hand. Its largest creditors are Wells Fargo, which it owes $1.3 million, and Frontiers Publishing, the founder of the magazine, which it owes $875,000. Noble has proposed to the bankruptcy court that Wells Fargo’s debt be settled with a payment of $140,000 and that the debt owed to Frontiers Publishing be settled with a payment of $95,153. It is unclear how or if various freelancers, printers and other vendors will be paid if the Vert acquisition is approved. Noble has said it will negotiate an employment contract with David Stern, publisher of Frontiers, and Dustin Tyner, its managing director of integrated media.
For what it’s worth, if you can buy Frontiers for $361k+, Without the heavy debt from Wells Fargo & David Stern, I think it’s a money-maker. It’s not like there is any competition left and this is a huge media market. The website is a potential money-maker and perhaps an app with links to various LGBT businesses, map guidance, etc. would be great for visitors.
I’m not sure Levin would need David Stern to run the paper. Maybe just Dustin and the core employees.