PledgeMusic’s bank-appointed receiver says it’s ‘unlikely’ that artists will see any of the money they’re owed.
We predicted this outcome back in July when PledgeMusic filed its wind up petition. Instead of heading into administration (the British equivalent of bankruptcy), PledgeMusic executives just closed up shop.
The Royal Courts of Justice granted the wind-up order. That sent the company into compulsory liquidation — with a court-appointed liquidator for the company’s assets. Members of the indie sector have asked the government to investigate the issue. But that seems as unlikely as artists getting a payout from the whole debacle.
Variety obtained a copy of a report from the bank-appointed receiver that is dated October 21st.
“I do not anticipate that I will need to contact you again because there is unlikely to be a payment to creditors in this case,” the receiver stated. “If that changes, I will contact you.”
Many artists who are owed money were advised to hire an insolvency lawyer in the UK. Benji Rogers returned to the company briefly this year to try and salvage it. The report paints a clearer picture of the efforts undertaken by Rogers.
A pivot plan was put into place to try and find a buyer for the company, but the idea was ultimately unsuccessful.
The letter also reveals that recent members of the PledgeMusic board were interviewed. They attribute the company’s insolvency to “the commission charged being insufficient to meet its expenditure.”
Essentially, the executives say PledgeMusic wasn’t taking in enough from fans to cover what it promised to deliver. That seems to echo reports that artists were being paid with funds from others’ campaigns, much like a pyramid scheme.
The obtained letter also says, “inquiries into the company’s affairs and reasons for its failure are continuing.” The book seems pretty much closed on this one. PledgeMusic failed as a platform and ran off with around $9.5 million in artists’ money.