"DEN Announces Plans to File Chapter 11"
Digital Entertainment Network, a startup online entertainment company, told its 150-person staff yesterday that it has run out of funding and can no longer pay employees, according to Reuters. The Santa Monica, Calif.-based company, which was backed by high-profile investors including Chase Capital Partners, Microsoft, Dell, NBC and former Warner Bros. co-chairman Terry Semel, said it plans to file for chapter 11 protection as soon as possible. DEN had already laid off more than 100 staffers earlier this year. Since it launched in 1998, the site has been sharply criticized for lavish spending on its two facilities and top execs, management shuffles and a sexual harassment lawsuit against co-founder Marc Collins-Rector by a 20-year-old, which many in the industry said had tainted the company's brand identity, crippling its fund-raising capabilities. In an attempt to make a comeback, DEN tried to appeal to its young audience, industry naysayers and investors with a flashy new site and original content, but financiers decided not to pump more money into the startup. DEN had raised $60 million to date, and last month announced it would halt production on its original slate of shows, which targeted such audiences as Christian teens and extreme-sports fanatics, and would acquire content from outside production houses in order to cut rising costs. An IPO filing, which would have sought out to raise $75 million, was canceled in February.
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