Troika Media Group: Blue Torch Sale and Liquidation

Troika Media Group: Blue Torch Sale and Liquidation


Debtor(s)	Troika Media Group, Inc. (13 jointly administered entities)
Court	U.S. Bankruptcy Court, Southern District of New York
Case Number	23-11969
Judge	Hon. David S. Jones
Petition Date	December 7, 2023
Confirmation Date	March 28, 2024
DIP Facility	$11 million from Blue Torch Finance ($7.5 million interim, $3.5 million final)

Case Snapshot

Troika's $125 Million Converge Direct Acquisition

Troika Media Group was a Nevada-incorporated, New York-headquartered media and advertising services company that traded on Nasdaq under the ticker TRKA. The company's core operating asset was Converge Direct, a data- and audience-centric media buying agency acquired in March 2022 for $125 million. At the time of filing, the business operated through two segments: Managed Services, which accounted for roughly 54% of 2023 revenue, and Performance Solutions, built around Troika's proprietary Helix analytics platform. The company employed about 80 people.

The Converge acquisition was financed with a $75 million first-lien secured facility from Blue Torch, a $50 million Series E preferred stock raise, and a $29.1 million escrow arrangement tied to post-closing obligations. The First Day Declaration attributed the chapter 11 filing to an acute liquidity crisis driven by defaults under the financing agreement, a more competitive advertising market, a general industry slowdown, management turnover, the cost of maintaining public-company compliance, and unresolved disputes with the Converge sellers over escrow and post-closing obligations.

Blue Torch Secured Facility and DIP Terms

Troika's funded obligations at the petition date consisted primarily of the $75 million Blue Torch secured loan, approximately $9.4 million in Converge-related payment obligations, and the $50 million Series E preferred equity. Of the original secured facility, $45 million was funded directly for purchase price, debt repayment, and working capital, while $29.1 million was placed in escrow — an arrangement that later became the central litigation and mediation dispute of the case.

The debtors obtained an $11 million DIP facility from Blue Torch and affiliated lenders under the DIP motion. The facility made $7.5 million available on an interim basis and released another $3.5 million after entry of the final order. DIP pricing included a 9.00% margin for reference-rate loans, 10.00% for SOFR loans, and a 2.00% default-rate step-up, plus a 5.00% closing fee, 2.00% exit fee, and a $100,000 agent fee. The proposed lien package included first-priority liens on unencumbered assets, priming liens on prepetition collateral, junior liens on property subject to permitted liens, and a carve-out for professional expenses.

DIP milestones. The facility required a bid deadline within 58 days of the petition date, an auction within 65 days, entry of a sale order within 70 days, sale closing within 75 days, and had a 90-day outside maturity date. All milestones fell within the first quarter of 2024.

Sale Process and Blue Torch Credit Bid

Troika entered chapter 11 with a restructuring support agreement under which Blue Torch's affiliate, Lender AcquisitionCo LLC, would serve as stalking horse with a credit bid of up to $51 million for substantially all assets. The bidding procedures order, entered January 3, 2024, set a January 18 bid deadline, a January 22 auction (if needed), and a January 30 sale hearing. The order approved expense-reimbursement protections and authorized the secured lenders to credit bid up to the full amount of prepetition secured debt, adequate-protection obligations, and DIP obligations.

No competing qualified bids were submitted by the January 18 deadline. The debtors canceled the auction on January 19 and designated the stalking horse as the successful bidder. The court approved the sale on February 8, 2024. The confirmation declaration stated that the sale closed on March 1, 2024, with BTC Converge Buyer LLC as the ultimate purchaser.

Grant Lyon, Troika's interim chief executive officer, said in the company's press release that the process was expected to be "relatively short" and that the Converge business would continue operating normally, with Michael Carrano and Maarten Terry — two long-term leaders of the Converge business — in leadership roles at the post-sale entity.

Mediation and Escrow Settlement

The $29.1 million acquisition escrow was disputed among multiple parties. The dispute involved the debtors, Blue Torch, the Converge sellers, and the official committee of unsecured creditors. On December 22, 2023, the debtors moved to appoint a judicial mediator, and the court entered a mediation order on January 17, 2024, referring the escrow disputes, employment disputes, and purchase-agreement disputes to nonbinding mediation before Judge Michael E. Wiles. The order required participation by all four parties and imposed confidentiality protections around mediation communications.

The mediation produced a Rule 9019 settlement that redistributed escrow proceeds among the parties. Under the settlement, participating Converge sellers received specified escrow distributions, the estates received approximately $7.9 million — including $3 million reserved for case administration and a $500,000 cash pot earmarked for general unsecured creditors — and remaining funds were distributed to Blue Torch at sale closing. The settlement also fixed the Blue Torch secured claim for plan purposes at no less than $79,427,958.50, provided for broad mutual releases, and required the participating sellers to support the plan if its terms remained consistent with the settlement. The sale closed on March 1, 2024, and the plan was confirmed on March 28.

Joint Liquidation Plan and Opt-In Releases

Troika confirmed a joint plan of liquidation — not a going-concern reorganization — on March 28, 2024, with the plan becoming effective the following day. Administrative, priority-tax, and priority non-tax claims were to be paid in full or otherwise treated as unimpaired.

Secured and unsecured treatment. Class 3 Blue Torch deficiency claims received pro rata interests in a litigation trust and were projected at 0% recovery. Class 4 general unsecured claims were to share in net available cash estimated at $500,000, with projected recoveries of 6.7% to 10% as described in the corrected disclosure statement. Class 5 equity interests were deemed to reject the plan and projected to receive nothing.

Releases and exculpation. The disclosure statement used an opt-in third-party release structure for most creditors and interest holders, while Blue Torch deficiency claimants were treated as releasing parties under the negotiated plan framework. The confirmation order found the release, exculpation, and injunction provisions consensual and integral to the plan, and confirmed the plan over Class 5's deemed rejection under section 1129(b).

Professional Fees and Case Administration

The case generated approximately $5.7 million in professional fee applications across five retained firms:

Willkie Farr & Gallagher (debtor's counsel): $3.23 million in fees and $34,419 in expenses, with the largest workstreams covering case administration, asset sales, court hearings, and DIP financing.
Jefferies (investment banker): $900,000 in fees and $47,713 in expenses, structured as $200,000 in monthly fees and a $1.25 million M&A transaction fee net of contractual credits.
McDermott Will & Emery (committee counsel): $1.15 million in fees and $10,600 in expenses, plus an additional $34,897 incurred after the primary fee period for fee-application work.
M3 Advisory Partners (committee financial advisor): $329,193 in fees and $181 in expenses, with financing matters as the largest category.
Kroll Restructuring Administration (administrative advisor): $70,357 in fees, primarily for solicitation and schedules/SOFAs support.

META Advisors Plan Administration

The notice of confirmation and effective date confirmed that the plan became effective on March 29, 2024, and that executory contracts and unexpired leases not previously assumed or rejected were deemed rejected on the effective date. The confirmation order provided for a plan administrator to serve as fiduciary for the estates and post-confirmation debtors, terminating the debtors' officers and directors on the effective date.

By February 2026, META Advisors LLC was serving as plan administrator. A motion to extend the claims-objection deadline filed on February 9, 2026 stated that the administrator still needed to terminate the debtors' 401(k) plan, resolve approximately 10 disputed priority tax claims, address three newly filed proofs of claim, and determine how much additional reconciliation work was warranted on roughly 230 outstanding general unsecured claims. The motion sought an extension to August 10, 2026.

Frequently Asked Questions

What happened to Troika Media Group?

Troika Media Group filed chapter 11 on December 7, 2023, after an acquisition-driven liquidity crisis. The company sold substantially all assets to a Blue Torch Finance affiliate through a court-supervised section 363 sale that closed on March 1, 2024. The court confirmed a joint plan of liquidation on March 28, 2024, and the plan became effective the following day.

What is the Troika Media Group case number?

The lead case number is 23-11969, filed in the U.S. Bankruptcy Court for the Southern District of New York before Judge David S. Jones.

Who is the claims agent for Troika Media Group?

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

What were creditor recoveries in the Troika bankruptcy?

The corrected disclosure statement projected general unsecured creditor recoveries of 6.7% to 10% from a $500,000 cash pool. Blue Torch deficiency claims received litigation trust interests projected at 0% recovery, and equity interests received nothing.

For more bankruptcy case coverage and court filing analysis, visit the ElevenFlo bankruptcy blog.