Just days before its largest trade show of the year is set to kick off, Key3Media Group Inc. announced late Thursday that it may file for Chapter 11 bankruptcy protection to "maintain continuity of services to its exhibitor and attendee clients," among other things.
The company, which produces such legendary trade shows as Comdex and NetWorld+Interop, made the announcement in its fiscal third quarter financial statement. In it, the company reported a net loss of $315.7 million for the quarter, compared with a net loss of $3.7 million for the same year-ago period. Revenues for the quarter were $38.4 million, compared with $51.5 million for the third quarter of 2001.
Comdex 2002 is set to kick off Sunday in Las Vegas.
A bankruptcy filing is only one possible outcome and would be part of an overall restructuring plan, according to officials of the Los Angeles company in its financial statement.
"As a result of the review and developments described above, Key3Medias board of directors has decided the Company cannot continue to operate its businesses in the near term under its existing capital structure and that it would be in the best long-term interests of the holders of the Companys shares and debt obligations to explore a possible restructuring (with or without additional capital), sale, business combination and/or other reorganization transaction which, if consummated, could result in a change of control of the Company," the statement read.
"Therefore, Key3Media intends to commence a structured process through its financial advisor Houlihan Lokey Howard & Zunkin to explore these alternatives shortly after its COMDEX/Fall tradeshow event, which will be held from November 18 through November 22, 2002.
"As part of, or after, this process, the Company might make a filing under Chapter 11 of the U.S. Bankruptcy Code. Key3Medias board believes this process represents the best alternative in these difficult times for preserving the value of its brands and businesses for its stakeholders and maintaining continuity of services to its exhibitor and attendee clients."
The news follows a string of negative announcements from the company. In September, it closed its Needham, Mass., office and at the same time announced plans to discontinue all regional shows, including Comdex Chicago and Comdex and N+I Atlanta.