Current News April 2008

Guccione Gets $35 Million Reprieve

Penthouse publisher Bob Guccione is being bailed out of his financial mess with $35 million in new loans. Facing an $18 million lawsuit for allegedly defaulting on a key bank loan, Guccione will receive$14.5 million from Kennedy Funding, Inc. officials of the Hackensack, New Jersey lender said yesterday.
The media mogul — whose General Media empire is floundering due to sagging circulation and revenues — also will get $20.6 million from insurance giant AIG, sources said. But Guccione is hardly out of the woods. He is expected to sell off some properties, including a prime piece of Atlantic City real estate that he owns, to pay off the loans.

"We've given him a year's worth of time (to do so)," said Kennedy President Joe Wolfer. The new loans are secured by Guccione's holdings, including a posh East Side townhouse, a Hudson Valley estate and a multimillion dollar art collection.

Part of the Kennedy Loan will be immediately used to pay back Cerebus Partners, a Manhattan-based lender which last month sued Guccione — alleging that he defaulted on a $9 million loan.

General Media chief financial officer Patrick Gavin confirmed the deal. An AIG spokesman declined comment.

General Media posted a net loss of $2.7 million in the first six months of '97, a 44% decline from a year ago as revenue in the six-month period dropped 13% to $50.4 million.