Utopia Music divisions are headed for bankruptcy, but its CEO says all of its outstanding tax debts have been paid.
Earlier this month, Digital Music News first reported on Utopia Music’s recent business moves, including divesting Absolute and ROSTR from its main business. The company also revealed plans to close two research and development offices in Finland and the UK. An internal memo sent by CEO Mattias Hjelmstedt described the closures as a necessary step to realize the ‘Fair Pay for Every Play’ vision.
The UK R&D division has reportedly been put into liquidation, while the R&D hub in Finland has filed for bankruptcy. A filing with the Finnish Company Registrar reveals this entity has been “declared bankrupt” and confirms the commencement of “bankruptcy proceedings” for the Finnish entity. Paperwork for the Finnish R&D company reveal a turnover of €8.95 million in 2022, with €5.15 million paid out in employee wages and other costs. It declared a gross profit of €562,163.91 at the end of 2022.
“Part of the reason the R&D entities in the UK and Finland were closed down was to safeguard our global operations,” a Utopia spokesperson told Complete Music Update when asked about the situation an employee pay.
Employees asking about their pay were reportedly told to speak with liquidators, while other third-party vendors are still awaiting the fulfillment of their outstanding invoices. A Utopia spokesperson acknowledged to DMN that the company had experienced “some hiccups in internal processes due to our transformation efforts,” adding that “all employees are in the process of being paid.”
Following our report on the state of Utopia Music, the company reached out to clarify some final points. “All outstanding tax debts have been cleared, including our financial obligations in Sweden,” adds Utopia Co-Founder and CEO Mattias Hjelmstedt. “We continue to actively work on this process to ensure that we never find ourselves in this position again.”