Digital Music News reports giving a chronology of the events leading up to what seemed the inevitable fire sale result of “new boss” syndrome:
Now, a leaked e-mail has revealed how bad things truly are for Rogers’ company, and for artists who depended on the platform.
“Please, please, please buy PledgeMusic! But, don’t worry. You don’t have to pay back artists.”
Earlier this morning, Digital Music News received an interesting e-mail from an anonymous source.
FRP Advisory LLP, a UK business advisory firm, has been named the proposed administrator of PledgeMusic.com Limited and its subsidiaries (dubbed ‘The Group’).
With a pre-liquidation fire sale set to take place, FRP Assistant Manager Robbie Wirdnam has now sought “expressions of interest in the business and assets of the Group’ – i.e., PledgeMusic.
“By way of introduction, I’m part of the corporate finance team at FRP and assisting my colleagues in the restructuring team, as the proposed administrators of PledgeMusic, in the marketing of the Group’s business and assets. As you have previously looked at the opportunity on a solvent basis, I’m circling back to determine whether you have an interest in the business and assets for sale, ahead of an administration process.” [“Administration” in the UK is sort of like bankruptcy.“]
Wirdnam explains that the British crowdfunding platform faced two ‘pressures’ which ultimately lead to its demise – working capital pressures and a lack of ongoing funding.
This is serious stuff. There’s potentially millions at stake and thousands of people worldwide who will be harmed, not only the artists but also fans and vendors, producers and songwriters.
UPDATE: As Jem Aswad in Variety notes in “PledgeMusic Nearing Bankruptcy, Although Sale Talks Continue“:
It should be noted that a buyer of PledgeMusic would be taking on the debts owed creditors, which include artists who launched programs with the company and owed money, which is estimated to be as much as $3 million total (here’s a small list of how much certain artists were owed, as of February). As the company has demonstrated in the past, tends to go to the most prominent, or at least the loudest, artists affected.
Hypebot also has a story on the FRP situation “Pledge enters pre-administration as buyer deliberates”:
UK based corporate advisory FRP has been named to contact potential buyers and value the company’s assets in pre-administration; while in parallel, the interested buyer finishes due diligence.
If no buyer steps forward within the week, PledgeMusic will likely enter Administration with FRP as the proposed administrator.
If you’re in Austin, Chris Castle is moderating a panel about Pledge with Jesse Moore and Peter Ruggero, two bankruptcy law experts. The panel is co-hosted by the Austin Bar Association Entertainment & Sports Law and Bankruptcy sections and titled “The Pledge Music Crowdfunding Debacle” on May 22. Here’s the event description:
The panel will review the reported facts on the decline of PledgeMusic.com, a crowdfunding platform directed at independent artists, established artists with significant fan bases and labels. PledgeMusic has taken in contributions from fans but has not paid out all or a significant portion of those funds to the artists for over a year. Many Texas consumers, artists and vendors have been affected by the company’s collapse.
The panelists will analyze the effects of this collapse on artists, the rights of consumers and vendors and the potential future outcomes if the company does not solve its financial crisis and seeks protection of the insolvency and bankruptcy laws.
As far as we know, this is the only response from the legal community so far. Chris tells us that it is directed at artists, fans and vendors as well as lawyers. $5 covers pizza and parking.
Wed, May 22, 2019
12:00 PM – 1:00 PM CDT
Austin Bar Association
816 Congress Avenue, Room # 700
Austin, TX 78701