Troika’s motion for mediation gets support from creditors committee

By Sarah Lizee

Olympia, Wash., Jan. 5 – Troika Media Group, Inc.’s official committee of unsecured creditors said it supports the debtor’s motion for mediation, according to documents filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Troika has asked the court to appoint a bankruptcy judge to serve as mediator with regard to some case issues. The committee is one of the proposed mediation parties.

“There is no dispute that the debtors’ financial position requires that these Chapter 11 cases progress swiftly,” the committee said in the documents.

“Further, the committee agrees with the debtors that moving the cases forward requires resolving the mediation issues.”

An escrow dispute described in the motion comprises a material issue in these cases, and successful mediation would help the parties to avoid protracted litigation and allow the debtors’ current leadership to focus on the needs of the business and the Chapter 11 process, the committee said.

Since June 2022, the company, lender Blue Torch, and individuals who sold Converge Direct, LLC to Troika have had a disagreement concerning the release from escrow of about $30 million funded from a $75 million secured loan from Blue Torch made in connection with the acquisition.

The core of the dispute is whether the audited financials that the debtors delivered on or about June 14, 2022, were sufficient to satisfy the condition for the release of the escrowed funds to the Converge sellers in line with the escrow agreement, the company had said in the mediation motion.

“Even if mediation did not result in a consensual resolution, it could allow the parties to narrow the disputed issues,” the committee said in its statement of support.

“Under the circumstances extant here, there is much to gain from appointing a judicial mediator.”

Troika is a brand consultancy and marketing company based in New York. The company filed bankruptcy on Dec. 7 under Chapter 11 case number 23-11969.

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