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Back to Section One | Back to Arts & Entertainment
posted Friday, January 28, 2011 - Volume 39 Issue 04
Judge OKs COLT Studios bankruptcy plan
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Judge OKs COLT Studios bankruptcy plan

by Mike Andrew - SGN Staff Writer

A federal bankruptcy judge approved COLT Studio Group's Chapter 11 bankruptcy plan on January 18, clearing the way for the financially troubled porn giant to pay off its debts to its former owner.

U.S. Judge Alan Jaroslavsky approved COLT's plan to continue in business while paying Jim French Studios $500,000 in 20 installments to settle claims resulting from French's 2003 sale of COLT to its current owners.

Porn industry pioneer Jim French founded COLT in 1967. Under his ownership, it grew into a diversified sex empire, dealing in porn, fetish gear, club apparel, and sex toys.

In addition to its COLT Studio flagship titles, subsidiary labels include Buckshot Productions, Minute Men, and Olympus.

COLT also produces and distributes content online through its website and adult video retailers worldwide.

French sold the company to its current owner, Prowest Media Corporation, in 2003. He now sells limited edition prints from his vast archive of erotic photographs.

According to court documents, Prowest owners John Rutherford and Thomas Settle had financial trouble shortly after closing the COLT purchase in 2003. By 2008, business for COLT was 'seriously declining,' court papers said.

Prowest Media eventually filed Chapter 11 bankruptcy, listing assets of $105,000 and liabilities of $2.9 million. Its largest creditor was Jim French Studios at $1.49 million.

Later, Jim French Studios brought suit in San Francisco Superior Court because COLT failed to make the payments on the original purchase agreement.

Both Rutherford and Settle then countersued French, and filed their own personal Chapter 7 cases.

In his ruling, Judge Jaroslavsky expressed the hope that the decision will allow COLT to continue in business.

'Confirmation of the [Chapter 11] plan is not likely to be followed by the liquidation or the need for further financial reorganization,' he wrote.

Under the terms of Jaroslavsky's ruling, Jim French Studios will have a stipulated judgment to recover its collateral and obtain other relief in the event of a default.

The terms also allow for Prowest's countersuit against Jim French Studios in San Francisco Superior Court to be dismissed.

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