Getty Images to file for bankruptcy

Seattle-based Getty Images plans to seek Chapter 11 bankruptcy protection under a restructuring agreement that would put the photography and video company entirely in the hands of Getty family investors and affiliates of Koch Equity Development and restructuring the company as a private entity. 

The company announced Monday that those investors have committed up to $533 million in new equity. Getty expects to complete the restructuring by the end of 2026.

The announcement follows months of financial pressure. Getty’s second-quarter earnings report showed $2.1 billion in debt as of June 30, compared with $51.6 million in cash. The company had another $30 million available through its revolving credit facility at quarter-end but borrowed that remaining amount in July.

Legal costs and interest payments have also drained cash. Getty reported paying $110.9 million during the second quarter for the Alta and CRCM warrant litigation judgment and associated interest, partially offset by $31.5 million in insurance proceeds. Cash interest payments increased by $62.9 million compared with the same quarter a year earlier. 

Under Monday’s agreement, participating unsecured bondholders would retire $270 million in notes. Secured lenders have agreed to lower interest obligations and extend repayment deadlines. Koch Equity Development would also provide up to $143 million in financing to support the restructuring.

Getty said it intends to continue normal operations and pay vendors in full during the process. “There is no anticipated impact on content contributors, partners, customers, or employees across the Company’s worldwide network,” the company said.

Getty plans to seek approval of its reorganization plan before beginning a prepackaged Chapter 11 process in the coming weeks. The filing would cover certain US entities, and the company said the necessary majority of creditors has committed to support the plan.

The restructuring follows Getty’s July decision to abandon its proposed merger with Shutterstock. Britain’s Competition and Markets Authority had conditionally approved the combination, requiring the sale of Shutterstock’s editorial business to an approved buyer. Getty’s board rejected proceeding with that sale, according to its earnings release. The British regulator said its investigation found that combining the editorial businesses would reduce options for UK media outlets and could increase prices. Getty formally terminated the merger agreement on July 7.

Despite its financial difficulties, Getty reported growth in its editorial division, which supplies news, sports, and entertainment imagery. Second-quarter editorial revenue rose 9.2 percent to $96.5 million, while creative revenue declined 2.6 percent to $127.4 million. Total quarterly revenue fell 2.5 percent to $229.1 million.