Guccione resigns from Penthouse company

Bob Guccione, the flamboyant founder of Penthouse magazine, resigned as CEO of its parent company but will remain publisher and editor as the magazine struggles to emerge from bankruptcy. Penthouse International Inc. also announced Friday that it had entered a stock-for-land swap that secured a $107 million oceanfront property in Mexico. The land will be developed into a Penthouse-themed resort. The Brooklyn-born Guccione, 72, left his position as CEO of Penthouse International just three months after its publishing subsidiary entered Chapter 11 bankruptcy reorganization. Guccione will keep his positions as editor in chief and publisher of the magazine. The medallion-wearing adult magazine entrepreneur will also retain his dual titles of chairman and CEO of General Media Inc., the publishing subsidiary of Penthouse International. "Nothing has changed as far as we`re concerned," said Lainie Speiser, spokeswoman for Penthouse. Guccione, through Speiser, declined to comment. Charles Samel, who also quit his position as executive vice president with Penthouse International, declined to provide any details about the resignations. Guccione was replaced as acting CEO of Penthouse International by Milton Polland, 90, head of a California communications company. Penthouse entered into the deal with Arizona-based Del Sol Investments LLC. for the property, which is located 60 miles north of Acapulco. Del Sol, in return, received 30 million common shares in Penthouse International and 11.5 million convertible preferred shares. "It`s a recapitalization," said lawyer Robert Feinstein. "Penthouse has acquired valuable real estate in Mexico in exchange for stock in the public company." The deal was made three months after Penthouse subsidiary General Media Inc. sought bankruptcy protection after the magazine`s circulation plunged. In August, General Media filed for Chapter 11 in New York after Penthouse`s circulation tumbled from nearly 1 million in 1998 to 565,700 last year. The slide coincided with a decision to feature hard-core pornography in its pages. The company had just under $40 million in debt when it filed. The company`s revenues had fallen by almost 50 percent since 1998. The magazine continued publication after the Chapter 11 filing as General Media restructured its debt and developed a reorganization plan. Feinstein said at the time that the company hoped to make money by licensing the Penthouse name to adult video, Internet sites or gentlemen`s clubs. Penthouse achieved its greatest success in the 1970s and 1980s, when its explicit photos made it a competitor to Playboy. The emergence of online pornography sites cut sharply into the Penthouse market.