Bankruptcy Sends HookMedia Reeling
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HookMedia, a Boston Internet media planner, has petitioned for Chapter 11 bankruptcy protection to buy time for a recently negotiated sale of certain assets, according to a memo sent to clients and creditors today.
The filing comes after one of HookMedia's largest clients drastically cut its business with the firm. The company, which has offices in New York, will continue to operate while the matter goes to court.
"Due to market conditions and the difficulties that some of our own clients have had in meeting their obligations, this was the only course of action open to us that allowed us to continue to operate, service our clients, advocate and educate others on this media," HookMedia said in a memo to clients.
HookMedia has reached an agreement with Media Contacts, a subsidiary of Havas Advertising, to sell some of its assets. HookMedia will ask the bankruptcy court to approve the deal by the end of May.
Based in Paris, Havas has four operating divisions: Euro RSCG Worldwide, in New York; Media Planning Group in Barcelona; Diversified Agencies Group in Paris; and Arnold Worldwide Partners, in Boston.
Two months ago, HookMedia closed its Atlanta office and laid off about 15 of its 100 employees, including business development, finance, marketing and human resource staffers in Boston.
Privately held HookMedia was founded in 1998. It has raised more than $16 million in two venture rounds from Bain Capital, Audax and Still River. Clients include Blue Cross/Blue Shield of Massachusetts, Cisco, EMC, HotJobs and PricewaterhouseCoopers.
HookMedia's cuts follow reductions at Engage, the Andover, Mass., online ad network and technology firm. Engage, majority-owned by CMGI, slashed 550 employees, about half its staff, in a bid to become profitable.
Other sector players, including New York-based ad networks DoubleClick and 24/7 Media, have also been pummeled from the plummet in the Web advertising market.