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Muzik Inc. – “Disruptive Technology Company” with Big Aspirations for Smart/Connected Headphones Files for Bankruptcy with over $50.0mn in Debt

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[Just filed. Developing story.] September 27, 2023 – Muzik Inc. (“Muzik” or the “Debtor”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Central District of California, lead case No. 23-16304 (Judge Vincent P. Zurzolo). The Debtor, a manufacturer of smart headphones or in its view "a disruptive technology company and innovation lab that connect culture with state-of-the art devices," is represented by Eve H. Karasik of Levene, Neale, Bender, Yoo & Golubchik L.L.P. 

The Debtor's lead petition notes between 100 and 200 creditors; estimated assets between $10.0mn and $50.0mn; and estimated liabilities between $10.0mn and $50.0mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as: (i) James Barberian ($2.2mn employee severance lawsuit claim), (ii) Sigma Connectivity AB ($2.2mn "Engineering" claim) and (iii) Cognition, LLC ($1.0mn convertible note claim). Wilson Sonsini has a $666k claim for professional services.

In 2018, the onetime headphone darling raised $70.0mn (revenues at the time @$2.0mn), including a reported $35.0mn from French billionaire Francois-Henri Pinault (Kering), with Muzik's CEO Jason Hardi and Pinault sharing aspirations "to marry Hardi's connected headphones—which allow users to share music via Twitter and Spotify, two early partners—with Kering's fashion clout and create a souped-up, higher-end Beats by Dr. Dre." 

Hardi drilled down on his then dreams: "We're building what ultimately could be one of the most powerful connected devices in the world…It will connect to every application. It will have tools for developers to leverage the technology that's inside." 

Querying Hardi's "build it and they will come" hopes for its "smartphone of headphones," Forbes wonders: "But will consumers shell out hundreds for a relatively unknown headphone just because of fancy branding—and technology that already exists in their smartphones?" to which tech analyst Ben Arnold of NPD Group (and perhaps the real visionary of the piece) replied: "It's not yet evident to me that people will want all these features in a headphone or know how to use them…"

See Forbes' piece here.

About the Debtors

 

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The post Muzik Inc. – “Disruptive Technology Company” with Big Aspirations for Smart/Connected Headphones Files for Bankruptcy with over $50.0mn in Debt appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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