The Work

March 18, 2011 4:52 PM

Penthouse, Playboy Dip into Am Law 100 Pool

Posted by Brian Baxter

Owners of adult publications Playboy and Penthouse were busy on the legal front this week, as the former hired a new general counsel and the latter announced plans to move forward with an initial public offering.

On Thursday, Playboy Enterprises named Rachel Sagan as its new general counsel. Sagan, 38, joins Playboy from Irvine, Calif.-based Freedom Communications, a publisher of more than 30 daily newspapers in California, North Carolina, and Texas.

Prior to joining Freedom in 2001, Sagan was an associate at Gibson, Dunn & Crutcher and Hancock Rothert & Bunshoft, which merged with Duane Morris in 2006. Sagan replaces longtime general counsel Howard Shapiro, who will remain in a special counsel role to the adult entertainment company, according to a statement by Playboy. (Yes, Playboy has had lawyers pose in its pages.)

Earlier this month, Playboy founder Hugh Hefner succeeded in leading a partnership taking the company private. The Am Law Daily reported in January that six Am Law 100 firms--including Skadden, Arps, Slate, Meagher & Flom, Kaye Scholer, and Munger, Tolles & Olson--were advising various parties on the deal.

The Hefner group had been engaged in a bidding war with Boca Raton, Fla.-based FriendFinder Networks, formerly known as Penthouse Media Group. FriendFinder currently owns about 30,000 adult social networking Web sites, as well as flagship publication Penthouse magazine.

FriendFinder, which postponed a $220 million initial public offering in early 2010, announced this week that it would move forward with a public listing despite the uneasy IPO market.

An SEC filing submitted on Thursday shows that FriendFinder has turned to Akerman Senterfitt partner Bradley Houser, the chair of the firm's corporate practice in Miami, for outside counsel on the offering. Brownstein Hyatt Farber Schreck is serving as Nevada counsel to the company, whose general counsel is former Greenberg Traurig and Kutak Rock partner David Gellen.

Dechert corporate partners Charles Weissman and Adam Fox are advising underwriters Imperial Capital and Ladenburg Thalmann on the Nasdaq-listed offering. SEC filings by FriendFinder estimate legal fees and expenses related to the offering at $7 million.

FriendFinder intends to use proceeds from the IPO to pay off portions of its $510 million debt, according to the company's SEC filing.

Robert Bell, a member of FriendFinder's board of directors, was a founder of New York firm Bell Kalnick Beckman Klee & Green in the early seventies, where he specialized in real estate joint ventures and investments. Bell's son, Marc Bell, currently serves as CEO of the company.

FriendFinder and Penthouse became one company in December 2007 after Penthouse, which has also let lawyers grace its pages, acquired the romantic Web site network for $500 million.

Bob Guccione, who founded Penthouse in 1965, died last year at age 79. After Guccione's death, Harvard Law School professor Alan Dershowitz, who represented Penthouse in court on obscenity charges, wrote this column for The Daily Beast expressing his admiration for the porn pioneer.

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