Mood Media, the parent company of background ‘elevator music’ mainstay Muzak, has filed for Chapter 11 bankruptcy.
Mood Media (formerly Fluid Music Canada) noted its intention to move forward with the Chapter 11 filing in a recently published release. Along with the bankruptcy plans, the announcement shed light upon a restructuring support agreement (RSA) with lenders, designed to reduce Mood Media’s debt by over $400 million, and $240 million in new financing to maintain liquidity amid the COVID-19 crisis.
Moreover, Mood Media relayed that it (like most other companies that seek Chapter 11 protection) plans to continue operating throughout the bankruptcy process, as it did while restructuring some $650 million in debt through a Chapter 15 filing in 2007. To be sure, Muzak itself filed for Chapter 11 bankruptcy protection in 2009, emerged from the corresponding proceedings in 2010, and was purchased by Mood Media for a reported $345 million in 2011.
In addition to Muzak, Mood Music has acquired several background music providers, including Trusonic, Technomedia, and its sister company, GoConvergence, during the last decade or so. The company also possesses Somerset Entertainment, a kiosk-based music distributor, Austin branding agency DMX, European audio-visual installation provider BIS Group, and former Muzak independent affiliate South Central A\V.
Mood Media has established an email address and a toll-free hotline for restructuring-related questions from clients and professionals.
Addressing his company’s restructuring support agreement and Chapter 11 bankruptcy filing, Mood Music CEO David Hoodis, a former Walmart executive, said: “We are now taking action to provide a clear and expedited path to strengthen our financial position, address our debt levels and enable us to be an even better partner to our clients as the world’s leading on-premise and connected media solutions Company. We appreciate the support of our financial stakeholders, which we believe represents their confidence in our business and will enable us to move through the process on an expedited basis.”
Possible underlying financial difficulties aside, Mood Media’s filing is a testament to the far-reaching economic effects of the novel coronavirus pandemic and its lockdown measures. An array of businesses temporarily closed during the crisis’s domestic onset, and even now, many states are limiting access to restaurants, amusement parks, and other public facilities that utilize background music.
Furthermore, the long-term implications of this financial fallout – specifically in terms of retail, restaurants, and the brands that they work with – may prove additionally substantial. Neiman Marcus, Brooks Brothers, J. Crew, and J.C. Penney are among the entities that have filed for bankruptcy amid the pandemic, and most are planning to permanently close a sizable portion of their stores.