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08 January 2016

Forbes: Tomorrowworld Parent Company Considering Bankruptcy Protection Amid Financial Woes

Since 2013, the three-day Tomorrowworld music festival brought thousands of people to Chattahoochee Hills, Georgia, and created a massive economic impact for the metro Atlanta region.

Behind the scenes, however, the company behind Tomorrowworld was experiencing some serious financial issues.

SFX Entertainment --the corporation that owns many popular electronic dance music (EDM) brands including Tomorrowland/Tomorrowworld, Life in Color, and Electric Zoo-- became mired in debt as they attempted to build an EDM juggernaut through the acquisition of various promotions and festivals.

SFX stock, which was initially offered to investors for $13 per share in 2013, suffered a steep decline -- even closing as low as $0.16 a share, as quarterly financial reports showed the company on shaky financial footing.

The third quarter financial results for three-month period beginning 1 July and ending 30 September 2015 indicated that SFX recorded a $54 million loss; making the total loss for the nine months ending 30 September 2015, $144 million.

Now, both Forbes and the Wall Street Journal are reporting that SFX Entertainment is considering bankruptcy protection.

Concert promoter SFX Entertainment Inc. said Thursday that it may file for bankruptcy to deal with its continuing debt troubles.

The company, which puts on electronic-music concerts like the Electric Zoo festival in New York, said in financial documents that it received a waiver of defaults on $30 million in debt through Jan. 28. In connection with that waiver, the company hired turnaround firm FTI Consulting Inc. to help it examine restructuring options that may be executed in bankruptcy, according to the documents.

“In order to facilitate its reorganization, the company may consider utilizing the available protections under the federal bankruptcy laws,” SFX said in the filing.

The impact this new turn of events has on Tomorrowworld remains to be seen.

Festival organizers have not yet announced the 2016 dates. However, Tomorrowland Belgium and Tomorrowland Brazil are still slated to be held as scheduled.