Back9Network, the golf-lifestyle network which went off the air in February after five months on air, has filed for Chapter 11 bankruptcy in federal court.
The company, founded by Jamie Bosworth and Reid Gorman in 2010, debuted on DirecTV after the 2014 Ryder Cup. In January 2015, the company failed to meet payroll for non-hourly employees. Then on Feb. 23, the company suspended operations, laying off most of the remainder of the 85 employees it had at its peak.
"The restructuring will result in a slimmed-down, online-focused golf entertainment network that can be successful and grow on a go-forward basis," said company CEO Charles Cox in a statement, according to multiple reports.
Back9Network raised approximately $38 million in backing from some 200 investors, including $6.2 million in unsecured debt and $5 million in loans and guarantees from the state of Connecticut. In an agreement reached with the state's Department of Economic and Community Development, payment on a $4 million loan has been deferred for five years, with the first payment due in April 2018. Payment on a separate $750,000 loan begins in November 2017. Both loans were made with a 1 percent interest rate and issued as part of a match of private investment attained by Back9.
Half of a third $250,000 loan was forgiven because the company hired 10 people in the 2012-13 fiscal year.
Among the hundreds of other debts listed in the filing are contractors who have filed lien claims against the company, saying Back9 never paid them for work, including, according to WNPR, a construction company seeking over $400,000, an architect seeking $15,000 and a drywall company seeking $10,000. A video and broadcast equipment rental company filed suit in December, seeking some $40,000 in past due payments. Money is also due to laid off employees, including former hosts John Maginnes, Jeff Rude and Caite Upton, as well deferred salary to the company's executive team.
In its filing, the company says it expects to complete the bankruptcy process by March 2016.
While Back9 is going through bankruptcy, the Securities and Exchange Commission is also looking into the relationship between Hartford Treasurer Adam Cloud and Back9, investigating if Cloud, whose father Sandy was on the Back9 board, used his government position to solicit investment in the company. Cloud maintains he has not broken any ethics laws.
A pair of investors are also suing the company, claiming they were misled about the nature of the company's relationship with DirecTV, saying they were unaware the network was paying $7 million per year to air its programming.
The company also says it has raised $2 million in capital from a group of five major individual investors to move forward with an online focus. The company's major asset is the Swing by Swing golf GPS app which Back9 purchased in 2014 and claims has been downloaded some 3 million times. Since the fall, the company has been using the email addresses from Swing by Swing accounts to push Back9Network content.
For his part, Bosworth, who was ousted by the Cloud-led board in July 2014, when reached by the Courant for comment, did not back the decision to restructure.
"What people invested in is being changed dramatically," he said. "There has been zero communications to me or most of the other … investors. I'm not sure if restructuring makes sense or not."