Muzak Holdings, the maker of elevator music, filed for Chapter 11 bankruptcy protection Tuesday.
The company had heavy debt load, and it filed to try to refinance some of its debt. Its total debt is between $100 million and $500 million and it has assets of less than $50,000, Muzak said in a court filing.
A company spokeswoman, Meaghan Repko, said total assets were actually higher, at roughly $320 million. That includes the Muzak LLC operating company, she said, which also filed for bankruptcy. She declined to give a more exact figure for the company's total debt.
Many of its biggest creditors are music companies that license songs for use on Muzak playlists. While the company is known as the creator of elevator music, its business is now more focused on creating playlists for use in retail stores, installing professional sound systems and other services.
Fort Mill, S.C.-based Muzak filed for court protection in the U.S. Bankruptcy Court in the District of Delaware in Wilmington. The company expects to continue to operate as is. A statement said it has "sufficient means" to support itself through a bankruptcy reorganization.
The company got an extension last month on $105 million in debt, it said in a statement. The extension ran out Tuesday.
Among its biggest unsecured creditors is U.S. Bank, which is owed $371 million according to a court filing. Bank lenders typically are classified as secured lenders. Secured lenders are paid before unsecured lenders.
Other top unsecured creditors include vendors such as Universal Music Enterprises, owed $349,321; EMI Capital Records, $320,323; AT&T, $257,384; and Dish Network, $251,276. The American Society of Composers, Authors and Publishers is owed $213,020, the filing said.
Sony Music, BMG Film & Television Music, United Parcel Service and Virgin Records were also listed among the unsecured creditors.
A list of secured creditors should be filed later.
Kirkland & Ellis was hired as its bankruptcy law firm. Moelis & Co. will serve as the company's financial adviser.