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Case 16-10238-MFW

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Docket
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IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
In re:

Chapter 11

SFX ENTERTAINMENT, INC., et al. 1

Case No. 16-10238 (MFW)

Debtors.

(Jointly Administered)
Hearing Date: March 21, 2016 at 2:00 p.m.
Objection Deadline: March 14, 2016 at 4:00 p.m.

MOTION OF THE DEBTORS FOR ENTRY OF AN ORDER


(A) APPROVING BID PROCEDURES RELATING TO THE SALE OF
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF BEATPORT, LLC,
(B) APPROVING NOTICE PROCEDURES, AND (C) GRANTING RELATED RELIEF
The above-captioned debtors and debtors-in-possession (collectively, the Debtors)
hereby move the Court (the Motion), pursuant to sections 105(a), 363 and 365 of title 11 of
the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code), Rules 2002, 6004,
6006 and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and
Rules 2002-1 and 6004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United
States Bankruptcy Court for the District of Delaware (the Local Rules), for entry of an order,
substantially in the form annexed hereto as Exhibit A (the Bid Procedures Order):
(a) approving the bid procedures in the form annexed as Exhibit 1 to the Bid Procedures Order
1

The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax
identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions
LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX
North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX
TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings
LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development
LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment
International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954);
SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX
Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate
Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC
(5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC
(0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC
(2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584);
Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands
Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.

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(as amended or modified, the Bid Procedures) to be implemented in connection with a sale
(the Sale) of all or substantially all of the assets of Beatport, LLC (the Beatport Assets);
(b) approving the notice procedures (the Notice Procedures) to advise parties in interest and
Potential Bidders (as defined below) of the Bid Procedures, the auction of the Beatport Assets
(the Auction), and the sale hearing for the Beatport Assets (the Sale Hearing); and
(c) granting related relief. In support of this Motion, the Debtors respectfully state as follows:
Status of the Case
1.

On February 1, 2016 (the Petition Date), the Debtors commenced these cases

(the Chapter 11 Cases) by filing voluntary petitions for relief under chapter 11 of the
Bankruptcy Code.
2.

The Debtors have continued in possession of their properties and are operating

and managing their businesses as debtors-in-possession pursuant to sections 1107(a) and 1108 of
the Bankruptcy Code.
3.

On February 12, 2016, an official committee of unsecured creditors (the

Committee) was formed in these Chapter 11 Cases. No request has been made for the
appointment of a trustee or examiner.
Jurisdiction, Venue and Statutory Predicates
4.

The Bankruptcy Court has jurisdiction over this Motion pursuant to 28 U.S.C.

157 and 1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2).
5.

Venue is proper under 28 U.S.C. 1408 and 1409.

6.

The statutory predicates for the relief requested herein are sections 105(a), 363

and 365 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 6006 and 9014 and Local Rules
2002-1 and 6004-1.

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Background
A. General Background
7.

The Debtors along with their non-Debtor affiliates (collectively, SFX) are a

leading producer of live events and digital entertainment content focused exclusively on
electronic music culture. The Debtors commenced material operations in 2012 with the intent of
acquiring and operating companies within the electronic dance music (EDM) industry,
specifically those engaged in the promotion and production of live music events, festivals and
digital offerings attractive to EDM fans in the United States and abroad. Over the next three
years, the Debtors acquired a number of leading EDM brands, such as TomorrowWorld,
Beatport, Mysteryland, Sensation and Electric Zoo, and expanded operations worldwide.
8.

Today, the Debtors are actively engaged in the production and promotion of EDM

festivals and events both domestically and abroad. In addition, the Debtors manage large,
event-driven nightclubs that serve as venues for performances by key electronic music talent.
The Debtors also offer an online platform for EDM DJs, artists and fans to purchase, share and
stream music components and to connect with each other.
9.

The Debtors and their 120 non-Debtor subsidiaries operate a business that spans

the globe, with operations in over 34 countries. The Debtors constitute substantially all of the
domestic companies comprising SFXs business as well as select foreign subsidiaries. The
Debtors have more than 325 employees and, together with the non-Debtor entities, have more
than 625 employees.
10.

The Debtors capital structure is highly levered. In 2015, the Debtors began to

face significant liquidity issues. While the Debtors attempted to enhance liquidity through a

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September 2015 financing and potential sales of non-strategic assets, the Debtors concluded that
they needed to restructure their liabilities through a bankruptcy process.
11.

Prior to the filing of these Chapter 11 Cases, the Debtors entered into a

restructuring support agreement with holders of over 70% of their outstanding secured debt. The
restructuring support agreement provides for a comprehensive restructuring of the Debtors
balance sheet. As part of that transaction, certain of the holders of the secured debt also agreed
to provide the Debtors with debtor-in-possession financing to allow for the Debtors to prosecute
these Chapter 11 Cases. The Debtors intend to use these Chapter 11 Cases to effect their balance
sheet restructuring and implement operational improvements.
12.

A detailed factual background of the Debtors businesses and operations, as well

as the events precipitating the commencement of these Chapter 11 Cases, is more fully set forth
in the Declaration of Michael Katzenstein in Support of the Debtors Chapter 11 Petitions and
Requests for First Day Relief (the First Day Declaration) [Docket No. 13] filed on the
Petition Date and incorporated herein by reference.
B. Acquisition of Beatport, LLC
13.
DJs.

Beatport, LLC (Beatport) was founded in 2004 as an online music store for

In connection with its acquisition and growth strategy, SFX purchased all of the

membership interests in Beatport, pursuant to the Agreement and Plan of Merger, dated as of
February 25, 2013, for consideration comprised of stock and cash. In 2015, SFX added a
streaming service component to Beatport, enhancing the online platform for EDM DJs, artists
and fans to connect with each other and to purchase, share and stream music components, such
as professional-quality audio files, coverage of EDM news and music charts, DJ sets and music
clips.

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C. Sale of the Beatport Assets


14.

After the acquisition, SFX made significant financial investments in

Beatport. While the Beatport Assets are valuable to the SFX enterprise, given SFXs current
financial condition, SFX cannot afford to make additional investments in Beatport as may be
needed in the future, and therefore, has decided to sell the Beatport Assets.
15.

In March of 2015, a special committee appointed by the Debtors board of

directors (the Special Committee) retained Moelis & Company LLC (Moelis) to review
strategic alternatives, including to solicit indications of interest from potential acquirers for SFX
as a whole or otherwise certain of its assets (the Special Committee Engagement). In
connection with the engagement, Moelis performed the following services: (i) prepared
marketing materials; (ii) contacted potential buyers; (iii) assisted the Debtors with buyer due
diligence; and (iv) reviewed indications of interest by potential bidders. With respect to the
Beatport Assets, during the engagement, Moelis was in contact with approximately 24 potential
buyers, of which 18 executed non-disclosure agreements and performed due diligence, with 3
potential buyers submitting preliminary indications of interest. This engagement concluded in
mid-November 2015.
16.

Contemporaneously with the conclusion of Moeliss engagement with the Special

Committee, the Debtors retained Moelis to provide investment banking services with respect to a
potential restructuring and/or recapitalization of the Debtors. As part of its engagement with the
Debtors, Moelis provided extensive prepetition services, including, but not limited to, (i)
assisting management in analyzing potential restructuring transactions; and (ii) facilitating
extensive due diligence for interested parties. Specifically with respect to the Beatport Assets,
Moelis and Beatport have been in contact with approximately 18 potential buyers, including

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certain potential buyers that expressed interest during the Special Committee Engagement. 5
new non-disclosure agreements were executed, and there has been 1 preliminary indication of
interest.
17.

In connection with obtaining debtor-in-possession financing, the Debtors agreed

to sell certain non-core assets, including, but not limited to, the Beatport Assets, through a sale
under section 363 of the Bankruptcy Code. Moelis has prepared a list of additional parties to
contact with respect to the Beatport Assets. The Debtors believe that Moeliss continued
marketing efforts and the contemplated sale process through section 363 of the Bankruptcy Code
will yield the maximum value for the Beatport Assets.
Relief Requested
18.

By this Motion, the Debtors seek the entry of the Bid Procedures Order

(a) approving the Bid Procedures; (b) approving the proposed Notice Procedures; and
(c) granting related relief. 2
A. The Bid Procedures
19.

The Debtors propose the Bid Procedures, which are incorporated herein by

reference, in an attempt to maximize the realization of value of the Beatport Assets for the
benefit of the Debtors estates. The Debtors are soliciting bids for the Beatport Assets based on
the form of asset purchase agreement (the Purchase Agreement) which the Debtors will
provide to interested bidders and, if bids are received in conformance with the Bid Procedures,
2

Through the Motion, the Debtors are not currently seeking the approval of bid protections for any potential bidder,
as the Debtors have not yet selected a potential bidder to serve as the stalking horse (a Stalking Horse Bidder).
However, if the Debtors receive sufficient interest and potential bidders are interested in serving as the Stalking
Horse Bidder, and the Debtors, in the exercise of their business judgment, determine that appointing a Stalking
Horse Bidder is in the best interest of their estates, the Debtors may negotiate an appropriate asset purchase
agreement with a potential bidder interested in serving as the Stalking Horse Bidder. In the event the Debtors elect
to negotiate an asset purchase agreement with a potential bidder to serve as the Stalking Horse Bidder, the Debtors
will seek appropriate relief from the Court.

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the Debtors will conduct the Auction to determine the highest and otherwise best bid for the
Beatport Assets. Specifically, the Bid Procedures provide, in relevant part, as follows 3:
a. Non-Disclosure Agreements, Letters of Intent, Diligence and Qualified Bidders
Any person or entity wishing to bid on the Beatport Assets (each a Potential
Bidder) must execute and deliver (unless previously delivered) to the Debtors a
confidentiality and non-disclosure agreement (a Non-Disclosure Agreement)
in form and substance acceptable to the Debtors. The Debtors will afford any
Potential Bidder who executes and delivers such Non-Disclosure Agreement
access to the Debtors confidential electronic data room concerning the Beatport
Assets.
All Potential Bidders must set forth in writing his/her/its, as applicable, intent to
bid under the Bid Procedures (each such writing, a Letter of Intent) and
deliver such Letter of Intent to the Debtors by the Letter of Intent Deadline. The
Debtors will afford any Potential Bidder who delivers a Letter of Intent by the
Letter of Intent Deadline such additional due diligence access or information as
may be reasonably requested by the Potential Bidder that the Debtors, in their
business judgment and in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, determine to be reasonable and appropriate,
including, without limitation, reasonable access, during normal business hours, to
the Debtors management, and access to any additional information regarding the
Beatport Assets reasonably necessary to enable a Potential Bidder to evaluate the
proposed Sale.
Moelis will coordinate all due diligence access and requests for additional
information from such Potential Bidders. The Debtors shall not be obligated to
furnish any due diligence information after the conclusion of the Auction.
Neither the Debtors nor their counsel or advisors are responsible for, or will bear
liability with respect to, any information obtained by Potential Bidders in
connection with due diligence. Notwithstanding anything contained herein to the
contrary, the Debtors, in their business judgment and in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, will decide what, if
any, diligence information to make available to a particular Potential Bidder, and
neither the Debtors nor their representatives will be obligated to furnish any
information of any kind whatsoever to any party.
The Debtors shall provide the Required Lenders, the Requisite Noteholders, and
the Committee, in each case, including their professionals, with periodic updates
3

This description of the Bid Procedures includes excerpts from the terms set forth in the Bid Procedures annexed
hereto. Capitalized terms used but not otherwise defined in this section have the meanings ascribed to them in the
Bid Procedures. To the extent that this description differs in any way from the terms set forth in the Bid Procedures,
the terms of the Bid Procedures shall control.

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every two (2) business days as to which Potential Bidders have entered into NonDisclosure Agreements.
A Qualified Bidder is a Potential Bidder that (a) delivers to counsel to the
Debtors a Non-Disclosure Agreement, (b) delivers to counsel to the Debtors a
Letter of Intent by the Letter of Intent Deadline, (c) demonstrates to the Debtors a
reasonable certainty of the ability to complete the Sale in a timely manner
(including the financial capability of the Potential Bidder to consummate the Sale
for the Beatport Assets and the ability to receive the necessary governmental,
licensing, regulatory, or other approvals necessary for such Sale, if any), and
(d) submits a Written Offer (as defined below) that is deemed a Qualified Bid as
set forth below, provided, however, that the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, may waive one or more
requirements for a Qualified Bidder. 4 The consultation/consent rights of any
party that participates in any bid or credit bid for the Beatport Assets shall be
terminated unless and until such bid or credit bid, as applicable, is rejected;
provided that any such party will have the same rights as any other Qualified
Bidder and will retain any rights it has under existing orders regarding debtor-inpossession financing and/or use of cash collateral (to the extent applicable). As
promptly as practicable after a Potential Bidder delivers a Non-Disclosure
Agreement and submits a Written Offer, and in all events not later than 12:00
p.m. (Eastern Time) two (2) days preceding the Auction, the Debtors, in
consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, shall determine, and the Debtors shall notify the Potential Bidder in
writing, whether the Potential Bidder is a Qualified Bidder.
Each Potential Bidder shall comply with all reasonable requests for information
and due diligence access by the Debtors or their advisors regarding the ability of
such Potential Bidder, as applicable, to consummate the proposed Sale.
b. Requirements for a Qualified Bid
In order to become a Qualified Bidder and participate in the Auction, if any, a
Potential Bidder must deliver to the Debtors, with a copy to counsel to the
Debtors, Moelis, counsel to the DIP Lenders, counsel to the Consenting
Noteholders, and counsel to the Committee, a written offer (each, a Written
Offer), which is deemed to be a Qualified Bid. To be deemed a Qualified
Bid, a Written Offer must meet each of the requirements listed below:
(i)

Delivery: Be delivered no later than 12:00 p.m. (Eastern Time) on


April 28, 2016 (the Bid Deadline).

Notwithstanding anything to the contrary herein, Wilmington Savings Fund Society, FSB (the DIP Agent), on
behalf of the DIP Lenders, and U.S. Bank National Association (the Second Lien Agent), on behalf of holders of
9.625% Senior Secured Notes Due 2019 issued by the Debtors (the Second Lien Noteholders), are hereby
determined to be Qualified Bidders for all purposes at the Auction, and shall be permitted, but not obligated, to
credit bid to the full extent permitted under section 363(k) of the Bankruptcy Code.

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(ii)

Executed Agreement: Be accompanied by (i) a clean and duly


executed and binding Purchase Agreement (together with the
exhibits and schedules thereto, a Modified Purchase
Agreement), (ii) a marked Modified Purchase Agreement
reflecting any variations from the Purchase Agreement, and (iii) a
list of any executory contracts or unexpired leases that are to be
assumed and/or assigned under such Written Offer, to the extent
such list is not included in the Modified Purchase Agreement.

(iii)

Compliance with the Restrictions on the Transfer of Personally


Identifiable Information: Contain a statement that the Potential
Bidder will comply with Beatports customer data privacy policy,
restricting the transfer of personally identifiable information of its
customers, as more fully set forth in the Purchase Agreement.

(iv)

Proof of Financial Ability to Perform: Contain evidence of


financing, access to funds or such other financial and other
information that will reasonably allow the Debtors, in consultation
with the DIP Lenders, the Consenting Noteholders, and the
Committee, to make a determination as to such Qualified Bidders
financial and other capabilities to consummate the transactions
contemplated by the Modified Purchase Agreement, which
evidence is satisfactory to the Debtors, after consultation with the
DIP Lenders, the Consenting Noteholders, and the Committee,
including, without limitation, such financial and other information
setting forth adequate assurance of future performance under
section 365 of the Bankruptcy Code in a form requested by the
Debtors.

(v)

Identification of Parties to Participate:


To the Debtors
satisfaction, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, (i) fully disclose the
identity of each entity or person that will be bidding for the
Beatport Assets or otherwise participating in connection with such
bid, (ii) the terms of any such participation, and if an entity has
been formed for the purpose of acquiring some, or all, of the
Beatport Assets, the parties that will bear liability for any breach
by such entity, and (iii) the ability of such parties to obtain
government, licensing or regulatory approval in connection with
the consummation of any Sale.

(vi)

Irrevocable: State that the Written Offer is irrevocable until (i) the
closing of the Sale, if such Potential Bidder is deemed a Qualified
Bidder, and such Qualified Bidder is designated as a Successful
Bidder (as defined below), or (ii) if such Potential Bidder is

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deemed a Qualified Bidder, and such Qualified Bidder is


designated as a Backup Bidder (as defined below), until the earlier
of (x) two (2) business days after the closing of the transaction(s)
by which all of the Beatport Assets that were subject to such
Backup Bid (as defined below) have been transferred to one or
more Qualified Bidders pursuant to these Bid Procedures and (y)
thirty (30) days after the date of the Auction (the Backup Bid
Expiration Date).
(vii)

No Break-Up Fee or Expense Reimbursement: The Written Offer


must not request or entitle the Potential Bidder to any transaction
or break-up fee, expense reimbursement, or similar type of
payment.

(viii) Contingencies: The Written Offer must not contain any due
diligence or financing contingencies.

(ix)

Authorization to Consummate Sale:


Provide evidence of
authorization and approval from the Potential Bidders board of
directors (or comparable governing body), if any, with respect to
the submission, execution, delivery and closing of the Modified
Purchase Agreement to the Debtors satisfaction, after consultation
with the DIP Lenders, the Consenting Noteholders, and the
Committee.

(x)

Purchase Price: Provide that any cash portion of the purchase


price shall be payable in U.S. dollars and will be paid in cash, cash
equivalents, or such other consideration acceptable to the Debtors,
subject to the consent of the Required Lenders 5 and the Requisite
Noteholders, 6 and in consultation with the Committee.

(xi)

Good Faith Deposit: Provide a good faith deposit (the Good


Faith Deposit) submitted via federal wire transfer in immediately
available funds in accordance with the wire instructions annexed
hereto as Exhibit A, or such other form as is acceptable to the
Debtors in an amount equal to the greater of $2 million or at least
10% of the purchase price set forth in the Written Offer.

(xii)

Anticipated Timeline: Set forth the anticipated timeframe for


(i) obtaining any required government, regulatory or other
approvals, and (ii) consummating the Sale within the requirements
of subparagraph (xiv) below.

Required Lenders shall have the meaning provided for such term in the DIP Loan Agreement.

6 Requisite Noteholders shall have the meaning set forth in the Restructuring Support Agreement.

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(xiii) Agreement with Bid Procedures, Provision of Additional


Information and Submission to Bankruptcy Court Jurisdiction:
Include a written acknowledgement by such Potential Bidder that it
(i) agrees to the terms of the Bid Procedures; (ii) agrees to provide
such other information as may be reasonably requested in writing
by the Debtors, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, prior to the Auction;
and (iii) confirms that the Potential Bidder submits to the
jurisdiction of the Bankruptcy Court.
(xiv)

Closing Date: Provide for a closing date (the Closing Date)


which shall be no later than 15 days after the entry of an order
approving the Sale (the Sale Order) or such other date as is
acceptable to the Debtors, subject to the consent of the Required
Lenders and the Requisite Noteholders, and in consultation with
the Committee.

The Debtors will promptly (but, in any case, within one (1) calendar day) deliver,
after receipt thereof, copies of all Written Offers to the DIP Lenders, the
Consenting Noteholders and the Committee, and, in each case, their professionals.
Between the Bid Deadline and the Auction, the Debtors, in consultation with the
DIP Lenders, the Consenting Noteholders, and the Committee, may (i) negotiate
or seek clarification of any Qualified Bid from a Qualified Bidder, (ii) request
information from the Qualified Bidder, (iii) engage in discussions with the
Qualified Bidder, or (iv) take such other actions contemplated under these Bid
Procedures. Without the consent of the Debtors, after consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, a Qualified Bidder may
not amend, modify or withdraw its Qualified Bid. All changes to the form of
Purchase Agreement reflected in the Modified Purchase Agreement will be
evaluated by the Debtors and must be acceptable to the Debtors, in their business
judgment and after consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee. Any Good Faith Deposit accompanying a
Written Offer that the Debtors, in consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, determine not to be a Qualified Bid
shall be returned promptly following such determination. For the avoidance of
doubt, the DIP Agent, on behalf of the DIP Lenders, and the Second Lien Agent,
on behalf of the Second Lien Noteholders, shall not need to comply with any of
the above requirements for becoming a Qualified Bidder and participating in the
Auction and are hereby determined to be Qualified Bidders.
c. Bid Deadline
All Qualified Bids must be received by each of the following parties prior to the
Bid Deadline: (i) the Debtors, SFX Entertainment, Inc., 902 Broadway, 15th

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Floor, New York, NY 10010, Attn:


Mike Katzenstein, e-mail:
Mike.Katzenstein@fticonsulting.com; (ii) the Debtors counsel, Greenberg
Traurig, LLP, 200 Park Avenue, New York, NY 10166, Attn: Maria J. DiConza,
fax:
(212) 801-6400, e-mail:
diconzam@gtlaw.com; (iii) the Debtors
investment banker, Moelis & Company LLC, 399 Park Avenue, 5th Floor, New
York, NY 10020, Attn: Adam Keil/Ryan Kitchen, Fax: (212) 880-4260, e-mail:
adam.keil@moelis.com/ryan.kitchen@moelis.com; (iv) counsel to the DIP
Lenders and Consenting Noteholders: Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, NY 10038, Attn: Jonathan D. Canfield/Joshua M.
Siegel, Fax:
(212) 806-6006, e-mail:
jcanfield@stroock.com
/jsiegel@stroock.com; and (v) counsel to the Committee, Pachulski Stang Ziehl &
Jones LLP, 150 California Street, 15th Floor, San Francisco, CA 94111, Attn:
Joshua M. Fried, Fax: (415) 263-7010, e-mail: jfried@pszjlaw.com.
d. Determination of Qualified Bidders
The Debtors shall, by no later than 12:00 p.m. (Eastern Time) two (2) days prior
to the Auction, (i) determine, in their business judgment and after consultation
with the DIP Lenders, the Consenting Noteholders, and the Committee, whether a
Potential Bidder is a Qualified Bidder, and (ii) notify each such Potential Bidder
that its Written Offer is a Qualified Bid and that such Potential Bidder is a
Qualified Bidder.
e. As Is, Where Is
Except as otherwise provided in the Final Purchase Agreement (as defined
below), the Sale of the Beatport Assets shall be on an as is, where is basis and
without representations or warranties of any kind, nature or description by the
Debtors, their agents or their estates except to the extent set forth in the Final
Purchase Agreement as approved by the Bankruptcy Court. Except as otherwise
provided in the Final Purchase Agreement, all of the Debtors right, title and
interest in and to the Beatport Assets subject thereto shall be sold free and clear of
all liens, claims, interests and encumbrances (collectively, the Interests) in
accordance with sections 363 and 365 of the Bankruptcy Code, with such
Interests to attach to the net proceeds of the Sale of the Beatport Assets.
Each Qualified Bidder shall be deemed to acknowledge and represent that it has
had an opportunity to conduct any and all desired due diligence regarding the
Beatport Assets prior to making its Qualified Bid, that it has relied solely upon its
own independent review, investigation and/or inspection of any documents and/or
the Beatport Assets in making its Qualified Bid, and that it did not rely upon any
written or oral statements, representations, promises, warranties or guaranties
whatsoever, whether express, implied, by operation of law or otherwise, regarding
the Beatport Assets, or the completeness of any information provided in
connection therewith or the Auction, except as expressly stated in these Bid
Procedures or, as to the Successful Bidder(s) and the Backup Bidder(s), the terms
of the Sale(s) as set forth in the final form of the applicable Modified Purchase
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Agreement(s) (the Final Purchase Agreement) which shall be on terms


mutually acceptable to the Successful Bidder and Backup Bidder, on the one
hand, and the Debtors, on the other hand, subject to the consent of the Required
Lenders and the Requisite Noteholders, and in consultation with the Committee.
f. Auction
If the Debtors, in consultation with the DIP Lenders, the Consenting Noteholders,
and the Committee, have selected two or more Qualified Bidders, the Debtors
shall conduct an Auction to determine the highest or otherwise best Qualified Bid.
This determination shall take into account any factors the Debtors, in consultation
with the DIP Lenders, the Consenting Noteholders, and the Committee,
reasonably deem relevant and may include, among other things, the following:
(i) the amount and nature of the consideration; (ii) the number, type and nature of
any changes to the Purchase Agreement requested by each Qualified Bidder in its
respective Modified Purchase Agreement; (iii) the extent to which such
modifications are likely to delay closing of the Sale of the Beatport Assets and the
cost to the Debtors of such modifications or delay; (iv) the total consideration to
be received by the Debtors; and (v) the likelihood of the Qualified Bidders ability
to close the Sale and the timing thereof.
The Auction shall commence at 11:00 a.m. (Eastern Time) on May 3, 2016, at the
offices of Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New
York, New York 10166, or such other place as determined by the Debtors, and
continue thereafter until completed. The Debtors, subject to the consent of the
Required Lenders and the Requisite Noteholders, and in consultation with the
Committee, reserve the right to cancel or postpone the Auction. The Debtors, in
consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, reserve the right to not proceed with any Sale.
Except as otherwise permitted in the Debtors discretion, only the Debtors, the
DIP Lenders, the Consenting Noteholders, the Committee, and Qualified Bidders
and, in each case, their respective professionals shall be entitled to attend the
Auction. Only a Qualified Bidder is eligible to participate in the Auction.
The Auction shall be governed by the following procedures:
(i)

Qualified Bidders shall appear in person at the Auction, or through a duly


authorized representative.

(ii)

The Debtors, in consultation with the DIP Lenders, the Consenting


Noteholders, and the Committee, may waive and/or employ and announce
at the Auction additional rules that are reasonable under the circumstances
for conducting the Auction provided that such rules are (i) not inconsistent
with the Bid Procedures Order, the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules of Bankruptcy Practice and Procedure of the
United States Bankruptcy Court for the District of Delaware, or any order
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of the Bankruptcy Court entered in connection with these Chapter 11


Cases, (ii) disclosed to each Qualified Bidder, and (iii) designed, in the
Debtors business judgment, to result in the highest or otherwise best offer
for the Beatport Assets.
(iii)

The Debtors will arrange for the actual bidding at the Auction to be
transcribed. Each Qualified Bidder shall designate a single individual to
be its spokesperson during the Auction.

(iv)

Each Qualified Bidder participating in the Auction must confirm on the


record, at the commencement of the Auction and again at the conclusion
of the Auction that it has not engaged in any collusion with the Debtors or
any other Qualified Bidder regarding these Bid Procedures, the Auction or
any proposed transaction relating to the Beatport Assets.

(v)

Prior to the Auction, the Debtors, in consultation with the DIP Lenders,
the Consenting Noteholders, and the Committee, shall identify the highest
and best of the Qualified Bids received (the Opening Qualified Bid).
Subsequent bidding will continue in minimum increments valued at not
less than $250,000 in cash and/or noncash consideration, or in such
amounts as to be determined by the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, prior to, and
announced at, the Auction. With respect to any subsequent bids, any
noncash consideration shall be subject to the consent of the Required
Lenders and the Requisite Noteholders.

(vi)

All Qualified Bidders shall have the right to, at any time, request that the
Debtors announce, subject to any potential new bids, the then-current
highest or best bid and, to the extent requested by any Qualified Bidder,
use reasonable efforts to clarify any and all questions such Qualified
Bidder may have regarding the Debtors announcement of the then-current
highest or best bid.

(vii)

In the Debtors discretion, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, all Qualified Bidders shall
have the right to submit additional bids and make additional modifications
to the Purchase Agreement or Modified Purchase Agreement, as
applicable, at the Auction, provided, however, that any such modifications
to the Purchase Agreement or Modified Purchase Agreement, on an
aggregate basis and viewed in whole, shall not be less favorable to the
Debtors as determined by the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee.

(viii) Upon conclusion of the bidding, the Auction shall be closed, and the
Debtors, in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, shall, as soon as practicable, (i) identify
and determine in their business judgment the highest and/or best Qualified

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Bid for the Beatport Assets (a Successful Bid and the entity or entities
submitting such Successful Bid, the Successful Bidder), (ii) advise the
Qualified Bidders of such determination, and (iii) require the Successful
Bidder to deliver an executed Final Purchase Agreement, which reflects its
bid and any other modifications submitted and agreed to during the
Auction, prior to commencement of the Sale Hearing.
(ix)

In addition, the Debtors, in consultation with the DIP Lenders, the


Consenting Noteholders, and the Committee, will determine which
Qualified Bid, if any, is the next highest and/or best Qualified Bid to the
Successful Bid, and will designate such Qualified Bid as a Backup Bid
in the event the Successful Bidder fails to consummate the contemplated
Sale. A Qualified Bidder that submitted a Qualified Bid that is designated
a Backup Bid is a Backup Bidder. Each Backup Bid shall remain open
and binding until the Backup Bid Expiration Date.

(x)

Following the conclusion of the Auction, the Debtors may resume bidding
on such procedures determined by the Debtors in their discretion, and in
consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, for the sale of any Beatport Assets not sold to the Successful
Bidder.

g. Sole Qualified Bidder


If, by the Bid Deadline, the Debtors, in consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, have selected only one Qualified
Bidder for the Beatport Assets, then the Debtors, subject to the consent of the
Required Lenders and the Requisite Noteholders, and in consultation with the
Committee, shall not hold an Auction and instead, shall, in consultation with the
DIP Lenders, the Consenting Noteholders, and the Committee, determine whether
to request at the Sale Hearing that the Bankruptcy Court approve the Qualified
Bid from the sole Qualified Bidder. Notwithstanding anything herein to the
contrary, nothing herein shall obligate the Debtors to consummate or pursue the
Sale of the Beatport Assets.
h. Sale Hearing
The Sale Hearing will be held before the Honorable Mary F. Walrath on May 5,
2016 at 12:00 p.m. (Eastern Time) at the United States Bankruptcy Court for the
District of Delaware, located in Courtroom 4, Fifth Floor, 824 Market Street,
Wilmington, DE 19801. At the Sale Hearing, the Debtors shall present the results
of the Auction, if one is held, to the Bankruptcy Court and may seek approval of
the Successful Bid and any Backup Bid.
Following the Sale Hearing and entry of a Sale Order approving the Sale of the
Beatport Assets to a Successful Bidder, if such Successful Bidder fails to
consummate the Sale for any reason, the Backup Bidder shall be designated the
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Successful Bidder and the Debtors shall be authorized to affect such Sale without
further order of the Bankruptcy Court. The Successful Bidder and Backup Bidder
(if any) should be represented by counsel at the Sale Hearing.
i. Return of Good Faith Deposits
Good Faith Deposits of all Qualified Bidders shall be held in a non-interest
bearing escrow account. Except for those of the Successful Bidder and Backup
Bidder(s), the Debtors shall promptly return the Good Faith Deposits of (i) all
Qualified Bidders after the Auction; and (ii) the Backup Bidder after the Backup
Bid Expiration Date.
B. Notice Procedures
20.

The Debtors request that the Court approve the following Notice Procedures in

connection with providing all parties in interest and Potential Bidders with notice of the Bid
Procedures, the Auction Date and the Sale Hearing as follows:
a. On or before three (3) business days after entry of the Bid Procedures Order, or as
soon thereafter as such parties can be identified, the Debtors will cause (a) a
notice in substantially the form annexed as Exhibit 2 to the Bid Procedures Order
(the Notice of Bid Procedures, Auction Date and Sale Hearing); and (b) a
copy of the Bid Procedures Order to be sent by first-class mail postage prepaid, to
the following: (i) the Office of the United States Trustee; (ii) counsel to the DIP
Lenders and the Consenting Noteholders; (iii) counsel to the Committee; (iv) all
taxing authorities in the states where the Debtors are located, including the
Internal Revenue Service, and all other federal, state and local taxing and
regulatory authorities known to the Debtors to assert jurisdiction over the Debtors
or which are reasonably expected by the Debtors to have claims, contingent or
otherwise, in connection with the ownership of the Beatport Assets, or to have
any known interest in the relief requested by the Motion; (v) all parties that have
requested or that are required to receive special notice pursuant to Bankruptcy
Rule 2002; (vi) all persons known or reasonably believed by the Debtors to have
asserted any lien, claim, encumbrance, right of first refusal, or other interest in or
upon any of the Beatport Assets; (vii) all persons known or reasonably believed to
have expressed an interest in acquiring the Beatport Assets within the last four (4)
months; (viii) the United States Attorneys office; (ix) Attorneys General in the
states where the Debtors are located; (x) any applicable state and local
environmental agencies; and (xi) all parties to any litigation involving the
Debtors.
b. On or before three (3) business days after entry of the Bid Procedures Order, the
Debtors will serve the Notice of Bid Procedures, Auction Date and Sale Hearing
on all known creditors of the Debtors.

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c. On or before seven (7) days after entry of the Bid Procedures Order, subject to
applicable submission deadlines, the Debtors will publish an abbreviated version
of the Notice of Bid Procedures, Auction Date and Sale Hearing once in one or
more regional and/or national publications that the Debtors deem appropriate.
21.

In addition to the foregoing, electronic notification of the Motion, the Bid

Procedures Order and the Notice of Bid Procedures, Auction Date and Sale Hearing will be
posted on: (i) the main case docket on the Bankruptcy Courts electronic case filing (ECF)
website; and (ii) the case management website maintained by the Debtors claims and noticing
agent, Kurzman Carson Consultants, LLC, located at www.kccllc.net/sfx.
Basis for Relief Requested
A. The Proposed Bid Procedures are Reasonable and Appropriate
22.

Section 363(b)(1) of the Bankruptcy Code provides, in relevant part, that a

debtor-in-possession, after notice and a hearing, may use, sell, or lease, other than in the
ordinary course of business, property of the estate. 11 U.S.C. 363(b)(l). Section 363 of the
Bankruptcy Code does not set forth a standard for determining when it is appropriate for a court
to authorize the sale or disposition of a debtors assets prior to confirmation of a plan. However,
courts in this Circuit and others have required that the decision to sell assets outside the ordinary
course of business be based upon the sound business judgment of the debtors. See In re Moore,
608 F.3d 253, 263 (5th Cir. 2010), Myers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir.
1996); Comm. of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071
(2d Cir. 1983); In re Decora Indus., Inc., 2002 WL 32332749, at *2 (D. Del. 2002); Dai-Ichi
Kangyo Bank, Ltd. v. Montgomery Ward Holding Corp., (In re Montgomery Ward Holding
Corp.), 242 B.R. 147, 153 (D. Del. 1999); In re Delaware & Hudson Ry. Co., 124 B.R. 169,
176 (D. Del. 1991).

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In determining the propriety of the sale of assets by a chapter 11 debtor prior to

confirmation of a plan of reorganization, the Second and Sixth Circuits, as well as other courts,
have applied, among other factors required by section 363 of the Bankruptcy Code, a sound
business purpose test. See Stephens Indus., Inc. v. McClung, 789 F.2d 386, 390 (6th Cir. 1986);
In re Lionel Corp., 722 F.2d at 1070-71; see also Titusville Country Club v. Pennbank (In re
Titusville Country Club), 128 B.R. 396, 399 (Bankr. W.D. Pa. 1991). In In re Solar Mfg. Corp.,
the Third Circuit, pursuant to section 116(3) of the Bankruptcy Act of 1938 (the predecessor to
section 363 of the Bankruptcy Code), applied the stricter standards of emergency or
perishability on a proposed pre-confirmation sale of a chapter 11 debtors assets. 176 F.2d
493, 494-95 (3d Cir. 1949). Although the Third Circuit has not specifically addressed the
application of the sound business purpose test, in In re Abbots Dairies of Pa., Inc., 788 F.2d
143, 143 (3d Cir. 1986), where the Third Circuit examined a pre-confirmation sale of assets of
chapter 11 debtors, the Court did not mention the Solar decision, leading other courts to [ ]
conclu[de] that the Third Circuit follows the sound business purpose test rather than the
emergency rule. See In re Titusville Country Club, 128 B.R. at 399.
24.

The sound business purpose test requires a debtor to establish four elements in

order to justify the sale or lease of property outside the ordinary course of business, namely,
(a) that a sound business reason justifies the sale of assets outside the ordinary course of
business, (b) that accurate and reasonable notice has been provided to interested persons, (c) that
the debtors have obtained a fair and reasonable price, and (d) good faith exists with respect to
the purchaser of the assets. Id.; In re Sovereign Estates, Ltd., 104 B.R. 702, 704 (Bankr. E.D.
Pa. 1989). The Debtors submit that the decision to proceed with the approval of the Bid
Procedures related to a potential sale is based upon their sound business judgment and should be

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approved. A debtors showing of a sound business purpose need not be unduly exhaustive but,
rather, a debtor is simply required to justify the proposed disposition with sound business
reasons. In re Baldwin United Corp., 43 B.R. 888, 906 (Bankr. S.D. Ohio 1984); see also In re
Indus. Valley Refrigeration and Air Conditioning Supplies, Inc., 77 B.R. 15, 21 (Bankr. E.D. Pa.
1987). Whether or not there are sufficient business reasons to justify a transaction depends upon
the facts and circumstances of each case. In re Lionel, 722 F.2d at 1071; In re Montgomery
Ward Holding Corp., 242 B.R. at 155.
25.

Additionally, section 105(a) of the Bankruptcy Code provides a bankruptcy court

with broad powers in the administration of a case under the Bankruptcy Code. Section 105(a)
provides that [t]he court may issue any order, process, or judgment that is necessary or
appropriate to carry out the provisions of [the Bankruptcy Code]. 11 U.S.C. 105(a). Provided
that a bankruptcy court does not employ its equitable powers to achieve a result not
contemplated by the Bankruptcy Code, the exercise of its section 105(a) power is proper. Matter
of Fesco Plastics Corp., Inc., 996 F.2d 152, 154 (7th Cir. 1993); Pincus v. Graduate Loan Ctr.
(In re Pincus), 280 B.R. 303, 312 (Bankr. S.D.N.Y. 2002). Pursuant to section 105(a), a court
may fashion an order or decree that helps preserve or protect the value of a debtors assets. See
Chinichian v. Campolongo (In re Chinichian), 784 F.2d 1440, 1443 (9th Cir. 1986) (Section
105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to the
purposes of the Bankruptcy Code.); In re Cooper Props. Liquidating Trust, Inc., 61 B.R 531,
537 (Bankr. W.D. Tenn. 1986) (noting that the Bankruptcy Court is one of equity and as such it
has a duty to protect whatever equities a debtor may have in property for the benefit of its
creditors as long as that protection is implemented in a manner consistent with the bankruptcy
laws.).

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The Debtors believe that the proposed Bid Procedures are reasonably designed to

enable the Debtors to generate the highest value for the Beatport Assets. The proposed Auction
presents a controlled, fair and open process that the Debtors believe will encourage bidding only
from seriously interested parties who possess the financial and operational capacity to purchase
the Beatport Assets. As such, the Bid Procedures promote the primary goal of maximizing the
value received by the estates.

Courts generally approve procedures that are intended to

encourage competitive bidding and are consistent with the goal of maximizing the value received
by the estates. See In re John Joseph Edwards, 228 B.R. 552, 561 (Bankr. E.D. Pa. 1998)
(bidding procedures should facilitate an open and fair sale and be designed to maximize value
for the estate).
27.

The Debtors also submit that the implementation of the Bid Procedures, if

approved, will satisfy the prongs of the sound business purpose test. For purposes of prong
one, the Debtors seek to sell the Beatport Assets in order to garner value for the benefit of their
estates. The second prong of the sound business purpose test will be satisfied because the
proposed Notice Procedures are designed to provide adequate notice to all potentially interested
parties, including those who previously expressed an interest in purchasing the Beatport Assets.
With respect to the third prong, the Debtors intend to continue to market the Beatport Assets, to
solicit interested bidders and to conduct the Auction in a manner that will yield an adequate price
for the Beatport Assets. Finally, the Bid Procedures incorporate a good faith requirement of all
Qualified Bidders applicable at both the commencement and conclusion of the Auction.
28.

Moreover, the Bid Procedures are designed to maximize the value received for

the Beatport Assets. The Debtors seek to determine the market for the Beatport Assets. The
process proposed by the Debtors allows for a fair auction process, providing bidders with

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sufficient time and information to submit a timely bid. If the Debtors receive sufficient interest
in a sale of the Beatport Assets, the Bid Procedures are designed to ensure that the Beatport
Assets will be sold for the highest or otherwise best possible purchase price under the
circumstances. Accordingly, the Debtors and all parties in interest can be assured that the
consideration received for the Beatport Assets will be fair and reasonable, and the third prong of
the sound business purpose test satisfied.
29.

The Bid Procedures provide that the Sale may include the transfer of personally

identifiable information, as defined in section 101(41A) of the Bankruptcy Code. However, no


consumer privacy ombudsman need be appointed under section 363(b)(1) of the Bankruptcy
Code because the Successful Bidder, and any Backup Bidder, as applicable, will have agreed to
adhere to any such privacy policies applicable to the Beatport Assets, as such policies may be
modified in accordance with the terms thereof. In re Velocity Express Corp., Case No. 09-13294
(MFW), 2009 WL 6690931, at *7 (Bankr. D. Del. 2009).
30.

The proposed Bid Procedures are reasonable, appropriate and within the Debtors

sound business judgment. They provide the Debtors with the best method for obtaining the
maximum realizable value for the Beatport Assets.

Thus, the Bid Procedures should be

approved.
B. The Notice Procedures are Reasonable and Appropriate
31.

The Debtors believe that the proposed Notice Procedures are appropriate and

reasonably calculated to provide all interested parties with timely and proper notice of the
Auction, the Bid Procedures to be employed in connection therewith and the Sale Hearing.

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The Debtors submit that the proposed Notice Procedures comply with Bankruptcy

Rule 2002 and Local Rule 2002-1. Therefore, the Debtors believe that the Notice Procedures are
reasonable, appropriate and should be approved.
Consent to Jurisdiction
33.

Pursuant to Local Rule 9013-1(f), the Debtors consent to the entry of a final

judgment or order with respect to this Motion if it is determined that the Court would lack
Article III jurisdiction to enter such final order or judgment absent consent of the parties.
Notice
34.

Notice of this Motion has been given to the following parties or, in lieu thereof, to

their counsel, if known: (a) the Office of the United States Trustee for the District of Delaware;
(b) the DIP Lenders; (c) the Committee; (d) Catalyst, as the successor Administrative Agent and
Lender to the Debtors prepetition Credit Agreement and Foreign Loan; (e) U.S. Bank National
Association, as Indenture Trustee to the Indenture governing the 2019 Notes; (f) creditors
holding the forty (40) largest unsecured claims as set forth in the consolidated list filed with
Debtors petitions; (g) those parties requesting notice pursuant to Bankruptcy Rule 2002; (h) the
Office of the United States Attorney General for the District of Delaware; (i) the Internal
Revenue Service; and (j) the Securities and Exchange Commission. The Debtors submit that, in
light of the nature of the relief requested, no other or further notice need be given.
No Prior Request
35.

No previous application for the relief sought herein has been made to this or any

other court.

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Conclusion
WHEREFORE, the Debtors respectfully request that this Court enter an order granting
the relief requested herein and granting such other and further relief as is just and proper.
Dated: February 29, 2016

GREENBERG TRAURIG, LLP


/s/ Dennis A. Meloro
Dennis A. Meloro (DE Bar No. 4435)
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 661-7000
Facsimile (302) 661-7360
Email: melorod@gtlaw.com
-andNancy A. Mitchell (admitted pro hac vice)
Maria J. DiConza (admitted pro hac vice)
Nathan A. Haynes (admitted pro hac vice)
200 Park Avenue
New York, New York 10166
Telephone: (212) 801-9200
Facsimile: (212) 801-6400
Email: mitchelln@gtlaw.com
diconzam@gtlaw.com
haynesn@gtlaw.com
Proposed Counsel for the Debtors and
Debtors-in-Possession

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IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
In re:

Chapter 11

SFX ENTERTAINMENT, INC., et al., 1

Case No. 16-10238 (MFW)

Debtors.

(Jointly Administered)
Hearing Date: March 21, 2016 at 2:00 p.m.
Objection Deadline: March 14, 2016 at 4:00 p.m.

NOTICE OF MOTION
PLEASE TAKE NOTICE that the above-captioned debtors and debtors-in-possession
(collectively, the Debtors) filed the Motion of the Debtors for Entry of an Order (A)
Approving Bid Procedures Relating to the Sale of All or Substantially All of the Assets of
Beatport, LLC, (B) Approving Notice Procedures, and (C) Granting Related Relief (the
Motion) with the United States Bankruptcy Court for the District of Delaware (the Court).
PLEASE TAKE FURTHER NOTICE that any response or objection to the relief
sought in the Motion must be filed with the Court, 824 North Market Street, 3rd Floor,
Wilmington, Delaware 19801 on or before MARCH 14, 2016, AT 4:00 P.M. PREVAILING
EASTERN TIME.
PLEASE TAKE FURTHER NOTICE that at the same time, you must also serve a
copy of the response or objection upon: (i) the Debtors, 902 Broadway, 15th Floor, New York,
NY 10010 (Attn: Michael Katzenstein); (ii) the Debtors proposed counsel, (a) Greenberg
Traurig, LLP, The Nemours Building, 1007 North Orange Street, Suite 1200, Wilmington, DE
1

The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax identification number,
if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions LLC (3613); EZ Festivals, LLC
(2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX North America LLC (5154); ID&T/SFX QDance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX TomorrowWorld LLC (7238); LETMA Acquisition
LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC
(0047); SFX Canada Inc. (7070); SFX Development LLC (2102); SFX EDM Holdings Corporation (2460); SFX
Entertainment, Inc. (0047); SFX Entertainment International, Inc. (2987); SFX Entertainment International II, Inc. (1998);
SFX Intermediate Holdco II LLC (5954); SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform
& Sponsorship LLC (9234); SFX Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live
Event Intermediate Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate
Holdco LLC (5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC
(0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC (2428);
SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584); Spring Awakening,
LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands Holdings B.V. (6898). The Debtors
business address is 902 Broadway, 15th Floor, New York, NY 10010.

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19801 (Attn: Dennis Meloro, Esq.) and (b) Greenberg Traurig, LLP, The Metlife Building, 200
Park Avenue, 38th Floor, New York, NY 10166 (Attn: Nancy A. Mitchell, Esq., Maria J.
DiConza, Esq. and Nathan A. Haynes, Esq.); (iii) counsel for the DIP Lenders and DIP Agent,
(a) Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, NY 10038 (Attn: Kristopher
M. Hansen, Esq., Jonathan D. Canfield, Esq., and Joshua M. Siegel, Esq.) and (b) Young
Conaway Stargatt & Taylor, LLP, 1000 N. King Street, Wilmington, DE 19801 (Attn: Matthew
Lunn, Esq. and Robert Poppiti, Esq.); (iv) counsel for the First Lien Agent, First Lien Lenders,
Foreign Loan Agent and Foreign Loan Lenders, (a) Brown Rudnick LLP, Seven Times Square,
New York, NY 10036 (Attn: Edward Weisfelner, Esq.) and (b) Ashby & Geddes, 500 Delaware
Avenue, Wilmington, DE 19801 (Attn: William Bowden, Esq.); (v) the Office of the U.S.
Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801 (Attn: Hannah
McCollum, Esq.); and (vi) proposed counsel to the Official Committee of Unsecured Creditors,
(a) Pachulski Stang Ziehl & Jones LLP, 150 California Street, 15th Floor, San Francisco, CA
94111 (Attn: Debra I. Grassgreen, Esq. and Joshua M. Fried, Esq.) and (b) Pachulski Stang Ziehl
& Jones LLP, 919 N. Market Street, 17th Floor, Wilmington, DE 19801 (Attn: Bradford J.
Sandler, Esq. and Colin R. Robinson, Esq.).
PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE
RELIEF SOUGHT IN THE MOTION WILL BE HELD ON MARCH 21, 2016 AT 2:00 P.M.
PREVAILING EASTERN TIME BEFORE THE HONORABLE MARY F. WALRATH AT
THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE,
824 MARKET STREET, 5TH FLOOR, COURTROOM NO. 4, WILMINGTON, DELAWARE
19801.
Dated: February 29, 2016

GREENBERG TRAURIG, LLP


/s/ Dennis A. Meloro
Dennis A. Meloro (DE Bar No. 4435)
The Nemours Building
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 661-7000
Facsimile: (302) 661-7360
Email: melorod@gtlaw.com

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-andNancy A. Mitchell (admitted pro hac vice)


Maria J. DiConza (admitted pro hac vice)
Nathan A. Haynes (admitted pro hac vice)
Greenberg Traurig, LLP
MetLife Building
200 Park Avenue
New York, NY 10166
Telephone: 212-801-9200
Facsimile: 212-801-6400
Email: mitchelln@gtlaw.com
diconzam@gtlaw.com
haynesn@gtlaw.com
Proposed Counsel for the Debtors and
Debtors-in-Possession

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Exhibit A
Proposed Order

Page 1 of 26

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IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
In re:

Chapter 11

SFX ENTERTAINMENT, INC. et al.,


Debtors.

Case No. 16-10238 (MFW)


(Jointly Administered)
Ref. Docket No. ___

ORDER (A) APPROVING BID PROCEDURES RELATING TO THE SALE OF ALL OR


SUBSTANTIALLY ALL OF THE ASSETS OF BEATPORT, LLC, (B) APPROVING
NOTICE PROCEDURES, AND (C) GRANTING RELATED RELIEF
Upon the motion, dated February 29, 2016 (the Motion) 2 of SFX Entertainment, Inc.
and its affiliated debtors and debtors-in-possession (collectively, the Debtors), pursuant to
sections 105, 363 and 365 of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the
Bankruptcy Code), Rules 2002, 6004, 6006 and 9014 of the Federal Rules of Bankruptcy
Procedure (the Bankruptcy Rules) and Local Rules 2002-1 and 6004-1, for entry of an order
(this Bid Procedures Order): (i) approving the bid procedures in the form annexed hereto as
Exhibit 1 (as amended or modified, the Bid Procedures) to be implemented in connection
1

The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax
identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions
LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX
North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX
TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings
LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development
LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment
International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954);
SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX
Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate
Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC
(5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC
(0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC
(2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584);
Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands
Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.
2

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Motion,
the Purchase Agreement, or the Bid Procedures, as applicable. In the event of a discrepancy between the definitions
contained in the Motion, the Purchase Agreement and the Bid Procedures, those contained in the Purchase
Agreement shall control.

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with a sale (the Sale) of all or substantially all of the assets of Beatport, LLC (the Beatport
Assets); (ii) approving the notice procedures (the Notice Procedures) to advise parties in
interest and Potential Bidders (as defined below) of the Bid Procedures, the auction of the
Beatport Assets (the Auction) and the sale hearing for the Beatport Assets (the Sale
Hearing); and (iii) granting related relief; the Court, having determined that the relief provided
herein is in the best interests of the Debtors, their estates, creditors and other parties in interest
and calculated to result in the highest and best offer for the assets at issue, and that the legal and
factual bases set forth in the Motion establish just cause for the relief granted herein; and all
objections and responses to the Motion having been resolved and otherwise withdrawn or
overruled; and due and adequate notice of the Motion having been given under the
circumstances; and upon the record of the hearing on the Motion, and the full record of this case;
and after due deliberation thereon; and good and sufficient cause appearing therefore:
IT IS HEREBY FOUND AND DETERMINED THAT:
A.

This Court has jurisdiction over the Motion and the transactions contemplated

therein pursuant to 28 U.S.C. 157 and 1334, and this matter is a core proceeding pursuant to
28 U.S.C. 157(b)(2). Venue in this district is proper under 28 U.S.C. 1408 and 1409.
B.

The Motion and this Bid Procedures Order comply with all applicable provisions

of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
C.

The notice given by the Debtors of the Motion and the hearing with respect to the

Motion constitutes proper, timely, adequate and sufficient notice thereof and complies with the
Bankruptcy Code, the Bankruptcy Rules and applicable Local Rules, and no other or further
notice is necessary, except as set forth herein with respect to the Auction and Sale Hearing.
D.

A reasonable opportunity to object or be heard regarding the relief provided

herein with respect to the Motion has been afforded to parties in interest.
2

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E.

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The proposed Notice Procedures are appropriate and reasonably calculated to

provide all interested parties with timely and proper notice of the Auction, the Bid Procedures to
be employed in connection therewith and the Sale Hearing.
F.

The Debtors have articulated good and sufficient business reasons for this Court

to approve (i) the Bid Procedures, (ii) the scheduling of the Auction and the Sale Hearing, and
(iii) related deadlines in connection with each of the foregoing.
G.

The Bid Procedures are reasonably designed to enable the Debtors to receive bids

for the Beatport Assets and represent the best method for maximizing the realizable value of the
Beatport Assets and serve to maximize estate value for the benefit of all of the Debtors
stakeholders and parties in interest.
H.

Entry of this Bid Procedures Order and the granting of the relief set forth herein

are in the best interests of the Debtors, their estates, creditors and other parties in interest.
IT IS HEREBY ORDERED THAT:
1.

The relief requested in the Motion as it relates to the Bid Procedures and the

scheduling of and notice to be approved with respect to the Auction and the Sale Hearing is
granted and approved as set forth in this Bid Procedures Order.
2.

All objections and responses to the Motion or the relief provided herein that have

not been withdrawn, waived or settled, and all reservations of rights included therein, hereby are
overruled and denied on the merits.
3.

The Bid Procedures, attached hereto as Exhibit 1, are incorporated herein and

approved in their entirety, and shall apply with respect to the sale of the Beatport Assets. The
failure to specifically include or reference a particular provision of the Bid Procedures in this Bid
Procedures Order shall not diminish or impair the effectiveness of such provision. The Debtors
are authorized to take all actions necessary or appropriate to implement the Bid Procedures. In
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the event of an inconsistency between this Bid Procedures Order and the Bid Procedures, the Bid
Procedures Order shall prevail.
4.

The Debtors are hereby authorized to pursue a Sale of the Beatport Assets in

accordance with the Bid Procedures.


5.

As further described in the Bid Procedures, the deadline for submitting Written

Offers for the Beatport Assets (the Bid Deadline) is April 28, 2016 at 12:00 p.m. (Eastern
Time).
6.

If there are two or more Qualified Bids, received in accordance with the Bid

Procedures, the Auction shall take place on May 3, 2016 at 11:00 a.m. (Eastern Time) at the
offices of Greenberg Traurig, LLP, 200 Park Ave., New York, NY 10166 or such other place and
time as the Debtors shall notify all Qualified Bidders, the DIP Lenders, the Consenting
Noteholders, counsel for the Committee and other invitees, if any.
7.

Notwithstanding anything to the contrary in the Bid Procedures, the DIP Agent,

on behalf of the DIP Lenders, and the Second Lien Agent, on behalf of the Second Lien
Noteholders, are deemed to be Qualified Bidders for all purposes at the Auction, and shall be
permitted, but not obligated, to credit bid to the full extent permitted under section 363(k) of the
Bankruptcy Code. The consultation rights or consent rights of any party that participates in any
bid or credit bid for the Beatport Assets shall be terminated unless and until such bid or credit
bid, as applicable, is rejected; provided that any such party will have the same rights as any other
Qualified Bidder and will retain any rights it has under existing orders regarding debtor-inpossession financing and/or use of cash collateral (to the extent applicable). All rights of the
secured creditors to object to any proposed treatment of their respective liens and claims are
preserved.
8.

The Auction shall be conducted in accordance with the Bid Procedures.


4

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9.

The Auction will be conducted openly.

10.

Bidding at the Auction will be transcribed.

11.

The Sale Hearing shall be held before this Court on May 5, 2016 at 12:00 p.m.

(Eastern Time) or as soon thereafter as counsel and interested parties may be heard.
12.

Objections, if any, to the Sale of the Beatport Assets to any Successful Bidder

and/or the relief requested in the Debtors motion to approve the Sale, other than the relief
approved in this Order, must be in writing and filed with the Court (i) on or before the date that
is seven (7) days before the date of the Sale Hearing or (ii) on or before the date that is one
(1) day before the Sale Hearing if the Auction is concluded less than seven (7) days prior to
the Sale Hearing and be served such that they are actually received by (i) counsel to the
Debtors, Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166, Attn: Maria
J. DiConza; (ii) counsel to the DIP Lenders and the Consenting Noteholders; and (iii) the Office
of the United States Trustee (Region 3), (the Notice Parties).
13.

The notices described in subparagraphs (a) (d) below are approved and shall be

good and sufficient, and no other or further notice shall be required if given as follows:
a.
On or before three (3) business days after entry of this Bid
Procedures Order, or as soon thereafter as such parties can be identified, the
Debtors will cause (a) a notice in substantially the form annexed hereto as
Exhibit 2 (the Notice of Bid Procedures, Auction Date and Sale Hearing);
and (b) a copy of the Bid Procedures Order to be sent by first-class mail postage
prepaid, to the following: (i) the Office of the United States Trustee; (ii) counsel
to the DIP Lenders and Consenting Noteholders; (iii) counsel to the Committee;
(iv) all taxing authorities in the states where the Debtors are located, including the
Internal Revenue Service, and all other federal, state and local taxing and
regulatory authorities known to the Debtors to assert jurisdiction over the Debtors
or which are reasonably expected by the Debtors to have claims, contingent or
otherwise, in connection with the ownership of the Beatport Assets, or to have
any known interest in the relief requested by the Motion; (v) all parties that have
requested or that are required to receive special notice pursuant to Bankruptcy
Rule 2002; (vi) all persons known or reasonably believed by the Debtors to have
asserted any lien, claim, encumbrance, right of first refusal, or other interest in or
upon any of the Beatport Assets; (vii) all persons known or reasonably believed to
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have expressed an interest in acquiring the Beatport Assets within the last four (4)
months; (viii) the United States Attorneys office; (ix) Attorneys General in the
states where the Debtors are located; (x) any applicable state and local
environmental agencies; and (xi) all parties to any litigation involving the
Debtors.
b.
On or before three (3) business days after entry of this Bid
Procedures Order, the Debtors will serve the Notice of Bid Procedures, Auction
Date and Sale Hearing on all known creditors of the Debtors.
c.
On or before seven (7) days after entry of this Bid Procedures
Order, subject to applicable submission deadlines, the Debtors will publish an
abbreviated version of the Notice of Bid Procedures, Auction Date and Sale
Hearing once in one or more regional and/or national publications that the
Debtors deem appropriate.
d.
In addition to the foregoing, electronic notification of the Motion,
the Bid Procedures Order and the Notice of Bid Procedures, Auction Date and
Sale Hearing, will be posted on: (i) the main case docket on the Bankruptcy
Courts electronic case filing (ECF) website; and (ii) the case management
website maintained by the Debtors claims and noticing agent, Kurtzman Carson
Consultants, LLC, at www.kccllc.net/sfx.
14.

The Notice of Bid Procedures, Auction Date and Sale Hearing to be issued in

connection with the proposed Sale of the Beatport Assets, substantially in the form annexed
hereto as Exhibit 2, is approved.
15.

Except as otherwise provided in this Bid Procedures Order, the Debtors, (i) in

consultation with the DIP Lenders, the Consenting Noteholders, and the Committee, or
(ii) subject to the consent of the Required Lenders and the Requisite Noteholders, and in
consultation with the Committee, as applicable and as set forth in the Bid Procedures, further
reserve the right as they may reasonably determine to be in the best interests of their estates,
subject to conformity with the Bid Procedures, to: (a) determine which Potential Bidders are
Qualified Bidders; (b) determine which Written Offers are Qualified Bids; (c) determine which
Qualified Bid is the highest or otherwise best proposal, the Successful Bid, and which is the next
highest or otherwise best proposal, the Backup Bid; (d) reject any bid that is (i) inadequate or
insufficient, (ii) not in conformity with the requirements of the Bid Procedures or the
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requirements of the Bankruptcy Code, or (iii) contrary to the best interests of the Debtors and
their estates; (e) waive terms and conditions set forth herein with respect to all Qualified Bidders;
(f) impose additional terms and conditions with respect to all Qualified Bidders; (g) extend the
deadlines set forth herein; (h) adjourn or cancel the Auction and/or Sale Hearing; and (i) modify
the Bid Procedures or withdraw the Motion at any time with or without prejudice.
16.

Except as otherwise provided in the applicable Final Purchase Agreement(s) or

Sale Order, all of the Debtors rights, title and interest in and to the Beatport Assets subject
thereto shall be sold free and clear of all liens, claims, interests and encumbrances (collectively,
the Interests) in accordance with sections 363 and 365 of the Bankruptcy Code, with such
Interests to attach to the net proceeds of the Sale of the Beatport Assets.
17.

The stays provided for in Bankruptcy Rules 6004(h) and 6006(d) are waived and

this Bid Procedures Order shall be effective immediately upon its entry.
18.

All time periods set forth in this Bid Procedures Order shall be calculated in

accordance with Bankruptcy Rule 9006(a).


19.

This Court shall retain jurisdiction with respect to all matters arising from or

relating to the interpretation or implementation of this Bid Procedures Order.


Dated: _________________, 2016
HONORABLE MARY F. WALRATH
UNITED STATES BANKRUPTCY JUDGE

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Exhibit 1
Bid Procedures

Page 9 of 26

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BID PROCEDURES FOR BEATPORT, LLC SALE


These bid procedures (the Bid Procedures) set forth the process by which
Beatport, LLC (Beatport and collectively, with its affiliated debtors and
debtors-in-possession, the Debtors), debtor and debtor-in-possession in the jointly
administered chapter 11 bankruptcy cases in the United States Bankruptcy Court for the District
of Delaware (the Bankruptcy Court), Case No. 16-10238 (MFW), shall market to interested
parties and conduct a sale (the Sale) by auction (the Auction) of all or substantially all of its
assets (the Beatport Assets). The Sale will be subject to bidding as set forth herein and
subject to the approval of the Bankruptcy Court, pursuant to sections 105, 363 and 365 of title 11
of the United States Code (the Bankruptcy Code).
On February 29, 2016, the Debtors filed the Motion of the Debtors for Entry of an Order
(A) Approving Bid Procedures Relating to the Sale of All or Substantially All of the Assets of
Beatport, LLC, (B) Approving Notice Procedures, and (C) Granting Related Relief (the
Motion) [Docket No. ____], to be heard by the Bankruptcy Court (i) on March 21, 2016 with
respect to the Bid Procedures, and (ii) on May 5, 2016 (or at such other time as the Bankruptcy
Court may determine) with regard to all other matters related to the Motion (the Sale
Hearing).
On ____________, 2016, the Bankruptcy Court entered an Order (A) Approving Bid
Procedures Relating to the Sale of All or Substantially All of the Assets of Beatport, LLC,
(B) Approving Notice Procedures, and (C) Granting Related Relief [Docket No. ____] (the Bid
Procedures Order), thereby approving these Bid Procedures. The Debtors, in consultation
with the DIP Lenders, 1 the Consenting Noteholders, 2 and the official committee of unsecured
creditors formed on February 12, 2016 (the Committee), reserve the right to modify the Bid
Procedures provided that any such modification shall not be inconsistent with the Bid Procedures
Order.
The form of asset purchase agreement (the Purchase Agreement) will serve as the
basis for bids in connection with this process. Capitalized terms used in these Bid Procedures
and not otherwise defined shall have the meanings ascribed to such terms in the Purchase
Agreement.
Any party desiring to obtain a copy of the Purchase Agreement, a form of
Non-Disclosure Agreement (as defined below) or other information regarding the sale process
1

DIP Lenders shall have the meaning provided for such term in that certain Senior Secured Super-Priority
Debtor-In-Possession Credit Agreement, dated as of February 10, 2016, by and among SFX Entertainment, Inc., the
guarantors named therein, the Lenders party thereto, and Wilmington Savings Fund Society, FSB (as may be
amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to
time in accordance with its terms) (the DIP Loan Agreement).
2

Consenting Noteholders shall have the meaning provided for such term in that certain Restructuring Support
Agreement, dated as of January 31, 2016, by and among the Debtors, the beneficial owners (or investment managers
or advisors for the beneficial owners) of the Second Lien Notes identified on Schedule 1 thereto, the other beneficial
owners (or investment managers or advisors for the beneficial owners) of the Second Lien Notes identified on the
signature pages thereto or that become a party thereafter, and Robert F.X. Sillerman (as may be amended, restated,
amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance
with its terms) (the Restructuring Support Agreement).

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may do so by contacting the Debtors investment banker, Moelis & Company LLC (Moelis)
at:
Moelis & Company LLC
399 Park Avenue, 5th Floor
New York, NY 10020
Attn:
Adam Keil/Ryan Kitchen
Fax:
(212) 880-4260
E-mail: adam.keil@moelis.com/ryan.kitchen@moelis.com
The Debtors provide these Bid Procedures for use by Potential Bidders (defined below)
and Qualified Bidders (defined below) in submitting bids proposing a transaction to purchase or
otherwise acquire the Beatport Assets, and, as necessary, qualifying for and participating in the
Auction.
1.

Important Dates

Letter of Intent Deadline: no later than 5:00 p.m. (Eastern Time) on March 29,
2016 (the Letter of Intent Deadline);

Bid Deadline:
Deadline);

Selection of Qualified Bidder(s): no later than 12:00 p.m. (Eastern Time) two (2)
days preceding the Auction;

Auction: 11:00 a.m. (Eastern Time) on May 3, 2016 at the offices of Greenberg
Traurig, LLP, MetLife Building, 200 Park Avenue, New York, New York 10166,
or such other place as determined by the Debtors;

Selection of Successful Bidder(s) and Backup Bidder(s) (each as defined below)


at the conclusion of the Auction;

Sale Hearing to seek authorization to sell the Beatport Assets to such Successful
Bidder(s): May 5, 2016 at 12:00 p.m. (Eastern Time); and

Closing Date: no later than 15 days after the entry of the Sale Order (as defined
below).

2.

Assets to be Sold

12:00 p.m. (Eastern Time) on April 28, 2016 (the Bid

The Debtors seek to sell the Beatport Assets.


3.

Non-Disclosure Agreements, Letters of Intent, Diligence and Qualified Bidders

Any person or entity wishing to bid on the Beatport Assets (each a Potential Bidder)
must execute and deliver (unless previously delivered) to the Debtors a confidentiality and
non-disclosure agreement (a Non-Disclosure Agreement) in form and substance acceptable to
the Debtors. The Debtors will afford any Potential Bidder who executes and delivers such Non2

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Disclosure Agreement access to the Debtors confidential electronic data room concerning the
Beatport Assets.
All Potential Bidders must set forth in writing his/her/its, as applicable, intent to bid
under the Bid Procedures (each such writing, a Letter of Intent) and deliver such Letter of
Intent to the Debtors by the Letter of Intent Deadline. The Debtors will afford any Potential
Bidder who delivers a Letter of Intent by the Letter of Intent Deadline such additional due
diligence access or information as may be reasonably requested by the Potential Bidder that the
Debtors, in their business judgment and in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, determine to be reasonable and appropriate, including, without
limitation, reasonable access, during normal business hours, to the Debtors management, and
access to any additional information regarding the Beatport Assets reasonably necessary to
enable a Potential Bidder to evaluate the proposed Sale.
Moelis will coordinate all due diligence access and requests for additional information
from such Potential Bidders. The Debtors shall not be obligated to furnish any due diligence
information after the conclusion of the Auction. Neither the Debtors nor their counsel or
advisors are responsible for, or will bear liability with respect to, any information obtained by
Potential Bidders in connection with due diligence. Notwithstanding anything contained herein
to the contrary, the Debtors, in their business judgment and in consultation with the DIP Lenders,
the Consenting Noteholders, and the Committee, will decide what, if any, diligence information
to make available to a particular Potential Bidder, and neither the Debtors nor their
representatives will be obligated to furnish any information of any kind whatsoever to any party.
The Debtors shall provide the Required Lenders, the Requisite Noteholders, and the
Committee, in each case, including their professionals, with periodic updates every two (2)
business days as to which Potential Bidders have entered into Non-Disclosure Agreements.
A Qualified Bidder is a Potential Bidder that (a) delivers to counsel to the Debtors a
Non-Disclosure Agreement, (b) delivers to counsel to the Debtors a Letter of Intent by the Letter
of Intent Deadline, (c) demonstrates to the Debtors a reasonable certainty of the ability to
complete the Sale in a timely manner (including the financial capability of the Potential Bidder
to consummate the Sale for the Beatport Assets and the ability to receive the necessary
governmental, licensing, regulatory, or other approvals necessary for such Sale, if any), and
(d) submits a Written Offer (as defined below) that is deemed a Qualified Bid as set forth below,
provided, however, that the Debtors, in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, may waive one or more requirements for a Qualified Bidder. 3
The consultation/consent rights of any party that participates in any bid or credit bid for the
Beatport Assets shall be terminated unless and until such bid or credit bid, as applicable, is
rejected; provided that any such party will have the same rights as any other Qualified Bidder
and will retain any rights it has under existing orders regarding debtor-in-possession financing
and/or use of cash collateral (to the extent applicable). As promptly as practicable after a
Potential Bidder delivers a Non-Disclosure Agreement and submits a Written Offer, and in all
3

Notwithstanding anything to the contrary herein, Wilmington Savings Fund Society, FSB (the DIP Agent), on
behalf of the DIP Lenders, and U.S. Bank National Association (the Second Lien Agent), on behalf of holders of
9.625% Senior Secured Notes Due 2019 issued by the Debtors (the Second Lien Noteholders), are hereby
determined to be Qualified Bidders for all purposes at the Auction, and shall be permitted, but not obligated, to
credit bid to the full extent permitted under section 363(k) of the Bankruptcy Code.

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events not later than 12:00 p.m. (Eastern Time) two (2) days preceding the Auction, the Debtors,
in consultation with the DIP Lenders, the Consenting Noteholders, and the Committee, shall
determine, and the Debtors shall notify the Potential Bidder in writing, whether the Potential
Bidder is a Qualified Bidder.
Each Potential Bidder shall comply with all reasonable requests for information and due
diligence access by the Debtors or their advisors regarding the ability of such Potential Bidder, as
applicable, to consummate the proposed Sale.
4.

Requirements for a Qualified Bid

In order to become a Qualified Bidder and participate in the Auction, if any, a Potential
Bidder must deliver to the Debtors, with a copy to counsel to the Debtors, Moelis, counsel to the
DIP Lenders, counsel to the Consenting Noteholders, and counsel to the Committee, a written
offer (each, a Written Offer), which is deemed to be a Qualified Bid. To be deemed a
Qualified Bid, a Written Offer must meet each of the requirements listed below:
(a)

Be delivered prior to the Bid Deadline;

(b)

Be accompanied by a clean and duly executed and binding Purchase


Agreement (together with the exhibits and schedules thereto, a Modified
Purchase Agreement);

(c)

Be accompanied by a marked Modified Purchase Agreement reflecting


any variations from the Purchase Agreement;

(d)

Be accompanied by a list of any executory contracts or unexpired leases


that are to be assumed and/or assigned under such Written Offer, to the
extent such list is not included in the Modified Purchase Agreement;

(e)

State that the Potential Bidder will comply with Beatports customer data
privacy policy, restricting the transfer of personally identifiable
information of its customers, as more fully set forth in the Purchase
Agreement;

(f)

Contain evidence of financing, access to funds or such other financial and


other information that will reasonably allow the Debtors, in consultation
with the DIP Lenders, the Consenting Noteholders, and the Committee, to
make a determination as to such Qualified Bidders financial and other
capabilities to consummate the transactions contemplated by the Modified
Purchase Agreement, which evidence is satisfactory to the Debtors, after
consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, including, without limitation, such financial and other
information setting forth adequate assurance of future performance under
section 365 of the Bankruptcy Code in a form requested by the Debtors;

(g)

To the Debtors satisfaction, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, (i) fully disclose the identity
of each entity or person that will be bidding for the Beatport Assets or
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otherwise participating in connection with such bid, (ii) the terms of any
such participation, and if an entity has been formed for the purpose of
acquiring some, or all, of the Beatport Assets, the parties that will bear
liability for any breach by such entity, and (iii) the ability of such parties
to obtain government, licensing or regulatory approval in connection with
the consummation of any Sale;
(h)

State that the Written Offer is irrevocable until (i) the closing of the Sale,
if such Potential Bidder is deemed a Qualified Bidder, and such Qualified
Bidder is designated as a Successful Bidder (as defined below), or (ii) if
such Potential Bidder is deemed a Qualified Bidder, and such Qualified
Bidder is designated as a Backup Bidder (as defined below), until the
earlier of (x) two (2) business days after the closing of the transaction(s)
by which all of the Beatport Assets that were subject to such Backup Bid
(as defined below) have been transferred to one or more Qualified Bidders
pursuant to these Bid Procedures and (y) thirty (30) days after the date of
the Auction (the Backup Bid Expiration Date);

(i)

Not request or entitle the Potential Bidder to any transaction or break-up


fee, expense reimbursement, or similar type of payment;

(j)

Not contain any due diligence or financing contingencies;

(k)

Provide evidence of authorization and approval from the Potential


Bidders board of directors (or comparable governing body), if any, with
respect to the submission, execution, delivery and closing of the Modified
Purchase Agreement to the Debtors satisfaction, after consultation with
the DIP Lenders, the Consenting Noteholders, and the Committee;

(l)

Provide that any cash portion of the purchase price shall be payable in
U.S. dollars and will be paid in cash, cash equivalents, or such other
consideration acceptable to the Debtors, subject to the consent of the
Required Lenders 4 and the Requisite Noteholders, 5 and in consultation
with the Committee;

(m)

Provide a good faith deposit (the Good Faith Deposit) submitted via
federal wire transfer in immediately available funds in accordance with the
wire instructions annexed hereto as Exhibit A, or such other form as is
acceptable to the Debtors in an amount equal to the greater of $2 million
or at least 10% of the purchase price set forth in the Written Offer;

(n)

Set forth the anticipated timeframe for (i) obtaining any required
government, regulatory or other approvals, and (ii) consummating the Sale
within the requirements of subparagraph (p) below;

Required Lenders shall have the meaning provided for such term in the DIP Loan Agreement.

Requisite Noteholders shall have the meaning set forth in the Restructuring Support Agreement.

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(o)

Include a written acknowledgement by such Potential Bidder that it agrees


to the terms of the Bid Procedures;

(p)

Agree to provide such other information as may be reasonably requested


in writing by the Debtors, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, prior to the Auction;

(q)

Confirm that the Potential Bidder submits to the jurisdiction of the


Bankruptcy Court; and

(r)

Provide for a closing date (the Closing Date) which shall be no later
than 15 days after the entry of an order approving the Sale (the Sale
Order) or such other date as is acceptable to the Debtors, subject to the
consent of the Required Lenders and the Requisite Noteholders, and in
consultation with the Committee.

The Debtors will promptly (but, in any case, within one (1) calendar day) deliver, after
receipt thereof, copies of all Written Offers to the DIP Lenders, the Consenting Noteholders and
the Committee, and, in each case, their professionals.
Between the Bid Deadline and the Auction, the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, may (i) negotiate or seek clarification
of any Qualified Bid from a Qualified Bidder, (ii) request information from the Qualified Bidder,
(iii) engage in discussions with the Qualified Bidder, or (iv) take such other actions contemplated
under these Bid Procedures. Without the consent of the Debtors, after consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, a Qualified Bidder may not amend,
modify or withdraw its Qualified Bid. All changes to the form of Purchase Agreement reflected
in the Modified Purchase Agreement will be evaluated by the Debtors and must be acceptable to
the Debtors, in their business judgment and after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee. Any Good Faith Deposit accompanying a Written
Offer that the Debtors, in consultation with the DIP Lenders, the Consenting Noteholders, and
the Committee, determine not to be a Qualified Bid shall be returned promptly following such
determination. For the avoidance of doubt, the DIP Agent, on behalf of the DIP Lenders, and the
Second Lien Agent, on behalf of the Second Lien Noteholders, shall not need to comply with any
of the above requirements for becoming a Qualified Bidder and participating in the Auction and
are hereby determined to be Qualified Bidders.
5.

Bid Deadline

All Qualified Bids must be received by each of the parties listed below prior to the Bid
Deadline.
Debtors:

SFX Entertainment, Inc.


902 Broadway, 15th Floor
New York, NY 10010
Attn: Mike Katzenstein
E-mail: Mike.Katzenstein@fticonsulting.com

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Debtors Counsel:

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Greenberg Traurig, LLP


200 Park Avenue
New York, NY 10166
Attn: Maria J. DiConza
Fax: (212) 801-6400
E-mail: diconzam@gtlaw.com

Debtors Investment
Banker:
Moelis & Company LLC
399 Park Avenue, 5th Floor
New York, NY 10020
Attn: Adam Keil/Ryan Kitchen
Fax: (212) 880-4260
E-mail: adam.keil@moelis.com/ryan.kitchen@moelis.com
Counsel to
the DIP Lenders
and Consenting
Noteholders:

Stroock & Stroock & Lavan LLP


180 Maiden Lane
New York, NY 10038
Attn: Jonathan D. Canfield/Joshua M. Siegel
Fax: (212) 806-6006
E-mail: jcanfield@stroock.com/jsiegel@stroock.com

Committee Counsel: Pachulski Stang Ziehl & Jones LLP


150 California Street, 15th Floor
San Francisco, CA 94111
Attn: Joshua M. Fried
Fax: (415) 263-7010
E-mail: jfried@pszjlaw.com
6.

Determination of Qualified Bidders

The Debtors shall, by no later than 12:00 p.m. (Eastern Time) two (2) days prior to the
Auction, (i) determine, in their business judgment and after consultation with the DIP Lenders,
the Consenting Noteholders, and the Committee, whether a Potential Bidder is a Qualified
Bidder, and (ii) notify each such Potential Bidder that its Written Offer is a Qualified Bid and
that such Potential Bidder is a Qualified Bidder.
7.

As Is, Where Is

Except as otherwise provided in the Final Purchase Agreement (as defined below), the
Sale of the Beatport Assets shall be on an as is, where is basis and without representations or
warranties of any kind, nature or description by the Debtors, their agents or their estates except to
the extent set forth in the Final Purchase Agreement as approved by the Bankruptcy Court.
Except as otherwise provided in the Final Purchase Agreement, all of the Debtors right, title and
interest in and to the Beatport Assets subject thereto shall be sold free and clear of all liens,
7

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claims, interests and encumbrances (collectively, the Interests) in accordance with sections
363 and 365 of the Bankruptcy Code, with such Interests to attach to the net proceeds of the Sale
of the Beatport Assets.
Each Qualified Bidder shall be deemed to acknowledge and represent that it has had an
opportunity to conduct any and all desired due diligence regarding the Beatport Assets prior to
making its Qualified Bid, that it has relied solely upon its own independent review, investigation
and/or inspection of any documents and/or the Beatport Assets in making its Qualified Bid, and
that it did not rely upon any written or oral statements, representations, promises, warranties or
guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the
Beatport Assets, or the completeness of any information provided in connection therewith or the
Auction, except as expressly stated in these Bid Procedures or, as to the Successful Bidder(s) and
the Backup Bidder(s), the terms of the Sale(s) as set forth in the final form of the applicable
Modified Purchase Agreement(s) (the Final Purchase Agreement) which shall be on terms
mutually acceptable to the Successful Bidder and Backup Bidder, on the one hand, and the
Debtors, on the other hand, subject to the consent of the Required Lenders and the Requisite
Noteholders, and in consultation with the Committee.
8.

Auction

If the Debtors, in consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, have selected two or more Qualified Bidders, the Debtors shall conduct an Auction
to determine the highest or otherwise best Qualified Bid. This determination shall take into
account any factors the Debtors, in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, reasonably deem relevant and may include, among other
things, the following: (i) the amount and nature of the consideration; (ii) the number, type and
nature of any changes to the Purchase Agreement requested by each Qualified Bidder in its
respective Modified Purchase Agreement; (iii) the extent to which such modifications are likely
to delay closing of the Sale of the Beatport Assets and the cost to the Debtors of such
modifications or delay; (iv) the total consideration to be received by the Debtors; and (v) the
likelihood of the Qualified Bidders ability to close the Sale and the timing thereof.
The Auction shall commence at 11:00 a.m. (Eastern Time) on May 3, 2016, at the offices
of Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, New York 10166,
or such other place as determined by the Debtors, and continue thereafter until completed. The
Debtors, subject to the consent of the Required Lenders and the Requisite Noteholders, and in
consultation with the Committee, reserve the right to cancel or postpone the Auction. The
Debtors, in consultation with the DIP Lenders, the Consenting Noteholders, and the Committee,
reserve the right to not proceed with any Sale.
Except as otherwise permitted in the Debtors discretion, only the Debtors, the DIP
Lenders, the Consenting Noteholders, the Committee, and Qualified Bidders and, in each case,
their respective professionals shall be entitled to attend the Auction. Only a Qualified Bidder is
eligible to participate in the Auction.

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The Auction shall be governed by the following procedures:


(a)

Qualified Bidders shall appear in person at the Auction, or through a duly


authorized representative.

(b)

The Debtors, in consultation with the DIP Lenders, the Consenting


Noteholders, and the Committee, may waive and/or employ and announce
at the Auction additional rules that are reasonable under the circumstances
for conducting the Auction provided that such rules are (i) not inconsistent
with the Bid Procedures Order, the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules of Bankruptcy Practice and Procedure of the
United States Bankruptcy Court for the District of Delaware, or any order
of the Bankruptcy Court entered in connection with these Chapter 11
Cases, (ii) disclosed to each Qualified Bidder, and (iii) designed, in the
Debtors business judgment, to result in the highest or otherwise best offer
for the Beatport Assets.

(c)

The Debtors will arrange for the actual bidding at the Auction to be
transcribed. Each Qualified Bidder shall designate a single individual to
be its spokesperson during the Auction.

(d)

Each Qualified Bidder participating in the Auction must confirm on the


record, at the commencement of the Auction and again at the conclusion
of the Auction that it has not engaged in any collusion with the Debtors or
any other Qualified Bidder regarding these Bid Procedures, the Auction or
any proposed transaction relating to the Beatport Assets.

(e)

Prior to the Auction, the Debtors, in consultation with the DIP Lenders,
the Consenting Noteholders, and the Committee, shall identify the highest
and best of the Qualified Bids received (the Opening Qualified Bid).
Subsequent bidding will continue in minimum increments valued at not
less than $250,000 in cash and/or noncash consideration, or in such
amounts as to be determined by the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee, prior to, and
announced at, the Auction. With respect to any subsequent bids, any
noncash consideration shall be subject to the consent of the Required
Lenders and the Requisite Noteholders.

(f)

All Qualified Bidders shall have the right to, at any time, request that the
Debtors announce, subject to any potential new bids, the then-current
highest or best bid and, to the extent requested by any Qualified Bidder,
use reasonable efforts to clarify any and all questions such Qualified
Bidder may have regarding the Debtors announcement of the then-current
highest or best bid.

(g)

In the Debtors discretion, after consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, all Qualified Bidders shall
have the right to submit additional bids and make additional modifications
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to the Purchase Agreement or Modified Purchase Agreement, as


applicable, at the Auction, provided, however, that any such modifications
to the Purchase Agreement or Modified Purchase Agreement, on an
aggregate basis and viewed in whole, shall not be less favorable to the
Debtors as determined by the Debtors, in consultation with the DIP
Lenders, the Consenting Noteholders, and the Committee.

9.

(h)

Upon conclusion of the bidding, the Auction shall be closed, and the
Debtors, in consultation with the DIP Lenders, the Consenting
Noteholders, and the Committee, shall, as soon as practicable, (i) identify
and determine in their business judgment the highest and/or best Qualified
Bid for the Beatport Assets (a Successful Bid and the entity or entities
submitting such Successful Bid, the Successful Bidder), (ii) advise the
Qualified Bidders of such determination, and (iii) require the Successful
Bidder to deliver an executed Final Purchase Agreement, which reflects its
bid and any other modifications submitted and agreed to during the
Auction, prior to commencement of the Sale Hearing.

(i)

In addition, the Debtors, in consultation with the DIP Lenders, the


Consenting Noteholders, and the Committee, will determine which
Qualified Bid, if any, is the next highest and/or best Qualified Bid to the
Successful Bid, and will designate such Qualified Bid as a Backup Bid
in the event the Successful Bidder fails to consummate the contemplated
Sale. A Qualified Bidder that submitted a Qualified Bid that is designated
a Backup Bid is a Backup Bidder. Each Backup Bid shall remain open
and binding until the Backup Bid Expiration Date.

(j)

Following the conclusion of the Auction, the Debtors may resume bidding
on such procedures determined by the Debtors in their discretion, and in
consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, for the sale of any Beatport Assets not sold to the Successful
Bidder.

Sole Qualified Bidder

If, by the Bid Deadline, the Debtors, in consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, have selected only one Qualified Bidder for the
Beatport Assets, then the Debtors, subject to the consent of the Required Lenders and the
Requisite Noteholders, and in consultation with the Committee, shall not hold an Auction and
instead, shall, in consultation with the DIP Lenders, the Consenting Noteholders, and the
Committee, determine whether to request at the Sale Hearing that the Bankruptcy Court approve
the Qualified Bid from the sole Qualified Bidder. Notwithstanding anything herein to the
contrary, nothing herein shall obligate the Debtors to consummate or pursue the Sale of the
Beatport Assets.

10

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10.

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Sale Hearing

The Sale Hearing will be held before the Honorable Mary F. Walrath on May 5, 2016 at
12:00 p.m. (Eastern Time) at the United States Bankruptcy Court for the District of Delaware,
located in Courtroom 4, Fifth Floor, 824 Market Street, Wilmington, DE 19801. At the Sale
Hearing, the Debtors shall present the results of the Auction, if one is held, to the Bankruptcy
Court and may seek approval of the Successful Bid and any Backup Bid.
Following the Sale Hearing and entry of a Sale Order approving the Sale of the Beatport
Assets to a Successful Bidder, if such Successful Bidder fails to consummate the Sale for any
reason, the Backup Bidder shall be designated the Successful Bidder and the Debtors shall be
authorized to affect such Sale without further order of the Bankruptcy Court. The Successful
Bidder and Backup Bidder (if any) should be represented by counsel at the Sale Hearing.
11.

Consummation of the Purchase


(a)

Closing Date; Good Faith Deposit

The Successful Bidder shall consummate the Sale contemplated by the Successful Bid
(the Purchase) on or before the Closing Date. If the Successful Bidder successfully
consummates the Purchase by the Closing Date, such Successful Bidders Good Faith Deposit
shall be applied to the purchase price of the Purchase.
If the Successful Bidder either: fails to consummate the Purchase on or before the
Closing Date, breaches the Final Purchase Agreement, or otherwise fails to perform, the Debtors
shall, without further order of the Bankruptcy Court, deem such Successful Bidder to be a
Defaulting Buyer.
The Debtors shall be entitled to (i) retain the Good Faith Deposit as part of their damages
resulting from the breach or failure to perform by a Defaulting Buyer, and (ii) seek all available
damages from such Defaulting Buyer occurring as a result of such Defaulting Buyers failure to
perform as may be provided for pursuant to the Final Purchase Agreement and the Sale Order.
(b)

Backup Purchase

Upon a determination by the Debtors, in consultation with the DIP Lenders, the
Consenting Noteholders, and the Committee, that the Successful Bidder is a Defaulting Buyer,
the Debtors shall consummate a Sale with the Backup Bidder on the terms and conditions of the
Backup Bid (the Backup Purchase) without further order of the Bankruptcy Court.
If the Backup Bidder consummates the Backup Purchase, the Good Faith Deposit of such
Backup Bidder will be applied to the purchase price of the Backup Purchase. In the event that
the Debtors seek to consummate the Backup Purchase with the Backup Bidder and such Backup
Bidder fails to consummate the Backup Purchase, breaches the Final Purchase Agreement or
otherwise fails to perform, the Debtors may, in their discretion and after consultation with the
DIP Lenders, the Consenting Noteholders, and the Committee, and without further order of the
Bankruptcy Court, deem such Backup Bidder to be a Defaulting Buyer and shall be entitled to
(i) retain the Good Faith Deposit as part of their damages resulting from the breach or failure to
perform by the Defaulting Buyer, and (ii) seek all available damages from such Defaulting Buyer
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occurring as a result of such Defaulting Buyers failure to perform as may be provided for
pursuant to the Purchase Agreement or Modified Purchase Agreement, as applicable, and the
Sale Order.
12.

Return of Good Faith Deposits

Good Faith Deposits of all Qualified Bidders shall be held in a non-interest bearing
escrow account. Except for those of the Successful Bidder and Backup Bidder(s), the Debtors
shall promptly return the Good Faith Deposits of (i) all Qualified Bidders after the Auction; and
(ii) the Backup Bidder after the Backup Bid Expiration Date.
13.

Reservation of Rights

The Debtors shall retain all rights to any of their assets that are not subject to the Sale that
is approved by the Bankruptcy Court at the Sale Hearing.

12

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Exhibit A
Good Faith Deposit Wire Instructions

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Exhibit 2
Notice of Bid Procedures, Auction Date and Sale Hearing

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IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
In re:

Chapter 11

SFX ENTERTAINMENT, INC., et al., 1

Case No. 16-10238 (MFW)

Debtors.

(Jointly Administered)
Sale Hearing Date: May 5, 2016 at 12:00 p.m.

NOTICE OF BID PROCEDURES, AUCTION DATE AND SALE HEARING


PLEASE TAKE NOTICE THAT:
1.
On February 29, 2016, the above-captioned debtors and debtors in possession (the
Debtors) filed the Motion of the Debtors for Entry of an Order (A) Approving Bid Procedures
Relating to the Sale of All or Substantially All of the Assets of Beatport, LLC, (B) Approving
Notice Procedures, and (C) Granting Related Relief [Docket No. ___] (the Bid Procedures
Motion) 2 with the United States Bankruptcy Court for the District of Delaware (the
Bankruptcy Court).
2.
By order dated ____________, 2016, the Bankruptcy Court approved the Bid
Procedures and the Bid Procedures Motion [Docket No. ___] (the Bid Procedures Order).
LLC.

3.

The Debtors are seeking bids for substantially all the assets of Debtor Beatport,

4.
All interested parties are invited to submit a Written Offer to purchase the
Beatport Assets in accordance with the terms and conditions of the Bid Procedures attached

The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax
identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions
LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX
North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX
TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings
LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development
LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment
International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954);
SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX
Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate
Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC
(5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC
(0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC
(2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584);
Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands
Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.
2

Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Bid Procedures
Motion.

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hereto as Exhibit A and the Bid Procedures Order. The deadline to submit a Written Offer (the
Bid Deadline) is April 28, 2016 at 12:00 p.m. (Eastern Time).
5.
Prior to the Bid Deadline, a Potential Bidder that desires to purchase the Beatport
Assets shall deliver its Written Offer in accordance with the procedures set forth in the Bid
Procedures.
6.
Pursuant to the Bid Procedures Order, in the event that the Debtors receive two or
more Qualified Bids by the Bid Deadline, the Debtors shall conduct an Auction to determine the
highest or otherwise best bid with respect to the Beatport Assets. The Auction shall commence
at 11:00 a.m. (Eastern Time) on May 3, 2016 at the offices of Greenberg Traurig, LLP, 200
Park Ave. New York, NY 10166, or at such other place and time as the Debtors shall notify all
Qualified Bidders, the DIP Lenders, the Consenting Noteholders, counsel for the Committee and
other invitees, if any.
7.
Objections, if any, to the Sale of the Beatport Assets to any Successful Bidder
and/or the relief requested in the Debtors motion to approve the Sale, other than the relief
approved in the Bid Procedures Order, must be in writing and filed with the Court (i) on or
before the date that is seven (7) days before the date of the Sale Hearing or (ii) on or before
the date that is one (1) day before the Sale Hearing if the Auction is concluded less than
seven (7) days prior to the Sale Hearing and be served such that they are actually received by
(i) counsel to the Debtors, Greenberg Traurig, LLP, 200 Park Avenue, New York, New York
10166, Attn: Maria J. DiConza; (ii) counsel to the DIP Lenders and the Consenting Noteholders;
and (iii) the Office of the United States Trustee (Region 3) (the Notice Parties).
8.
The Sale Hearing shall be conducted by the Bankruptcy Court on May 5, 2016, at
12:00 p.m. (Eastern Time), or on such other date as the Bankruptcy Court may direct. Requests
for a copy of the Purchase Agreement or for any other information concerning the Sale of the
Beatport Assets should be directed, by written request, to the Debtors investment banker listed
above.
Dated:

Respectfully Submitted,
GREENBERG TRAURIG, LLP
/s/ DRAFT
Dennis A. Meloro (DE Bar. No. 4435)
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 661-7000
Facsimile: (302) 661-7360
Email: melorod@gtlaw.com
-and-

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Nancy A. Mitchell (admitted pro hac vice)


Maria J. Diconza (admitted pro hac vice)
Nathan A. Haynes (admitted pro hac vice)
200 Park Avenue
New York, New York 10166
Telephone: (212) 801-9200
Facsimile: (212) 6400
Email: mitchelln@gtlaw.com
diconzam@gtlaw.com
haynesn@gtlaw.com
Proposed Counsel for the Debtors
and Debtors-in-Possession

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