Muzak doesn’t like to be in the foreground, at least not in this way. Now you can add its name to the lengthening line of companies that have sought relief from debts in an effort to stay in business.
The company filed bankruptcy papers Tuesday after it missed a $105 million payment to creditors.
It said it filed for voluntary Chapter 11 debt relief, describing itself as a “solid business with an outstanding customer base,” but “burdened with substantial debt obligations established over a decade ago.” Chapter 11 allows a company to reorganize.
Along with its “elevator music” offerings, Muzak and its 14 affiliates — all privately owned — produce on-hold messages and install sound systems, digital signs and drive-thru systems for retail businesses.
We reported in January that it had won a short extension of that key credit agreement.
AP reported this week that bankruptcy documents showed Muzak owes its largest creditor — U.S. Bank, as indentured trustee — about $370 million, nearly all of it due this year.