Ask Penthouse founder Bob Guccione why his operation's publishing subsidiary was finally forced to file for bankruptcy last week, and he'll tell you it was a porn glut – especially Internet porn.
"Today," he said in an interview coming in the September Details, "there are triple-X videos, adult channels, and pay-per-view films; there are strip clubs, phone sex, and most of all, Internet sites that have no restrictions. Attractive women are flooding the porn market in a way that surprises even me."
Penthouse's publishing arm, General Media, filed for Chapter 11 bankruptcy August 12. They'd closed on a $5 million debtor-in-possession line of credit from "some of its secured bondholders" and hired T. Scott Avila as chief restructuring officer as part of what the company hopes will be the beginning of a turnaround. General Media's auditor left in May, after a dispute over the company's financial statements, and the Securities and Exchange Commission started a probe into General's 2002 and early 2003 financial results, Reuters reported hours after the Chapter 11 filing.
Guccione himself issued a formal statement after the filing that it offered a chance for reorganizing and refinancing that would mean a "stronger position" to continue survival of the Penthouse brand.
Earlier reports of Penthouse's actual and alleged financial crises indicated the magazine was struggling above all with trying to compete in a milieu where the Internet had sliced heavily enough into the audience for classic still adult imagery and writing.
