While PlanetOut‘s Gay.com community site may still have some value, it may not be valuable enough to keep the company out of Chapter 11, Barrons reports. The owners of PlanetOut, which operates websites, magazines and travel services for the gay and lesbian community, hopes to raise at least $15 million in new equity or subordinated debt - $7 million by June 30 and the rest by August 31 – as it tries to dig out from $26.5 million in debt.

SEE ALSO: Earnings: PlanetOut’s Q1 Losses Widen; Shares Plummet 30 Percent

The company has hired Allen & Co. to help it raise the money and consider strategic alternatives; the company is considering selling equity, borrowing more cash or selling all of some of its operations. The San Francisco Chronicle reports that PlanetOut’s dire financial straits are the result its declining subscriptions for personal ads, a shortfall in ad revenue and difficulty booking passengers on its gay-oriented cruises. 

The trouble began two years ago when PlanetOut went on a shopping spree, acquiring the RSVP Vacations cruise business and LPI Publications, publishers of Out, OutTraveler, and The Advocate, as well several pornographic magazines under the Specialty Publications brand. The Bay Area Reporter picks up on those as well as several senior executives have resigned. As an example of the costs associated with these defections, this past March, Jeff Soukop, the company’s president and chief operating officer, left, costing the company $700,000 in severance. And even the value of its web properties have diminished, as PlanetOut executives say some of the problems besetting the company are due to the migration of gay people to sites such as MySpace.