Hipgnosis Songs Fund Announces High-Profile Board Departure As Restructuring Deadline Nears

Hipgnosis songs fund
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Hipgnosis songs fund
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Photo Credit: Hipgnosis Songs Fund

As the fate of Hipgnosis Songs Fund (HSF) hangs in the balance, longtime director Sylvia Coleman has officially exited the board.

Hipgnosis announced Coleman’s resignation, representing the newest in a series of shake-ups at the troubled company, via a brief release. Appointed to the board in November of 2019, the EMI and Sony Music vet Coleman provided valuable assistance during the past three or so months in particular, according to chair Robert Naylor.

“We’re very grateful to Sylvia for the support she’s given to the Company and I am especially appreciative of the help she’s provided to me and my fellow new Board Directors over the last few months as the Board has transitioned and reshaped itself,” communicated Naylor. “I would like to thank her and wish her all the best for success in the future.”

For those who’ve followed the Hipgnosis saga even in passing, it’ll be clear that these concise, polite remarks contrast the nature of the controversy engulfing the formerly high-flying IP purchaser, a majority of investors in which have formally opposed its continuation.

As a result of the October vote coinciding with the latter, HSF’s board has until late April of this year to submit to shareholders a plan for the company’s future, potentially including the liquidation of its assets. But complicating the restructuring and possible IP selloff are (among other things) concerning clauses in HSF’s agreement with its Blackstone-powered investment adviser, Hipgnosis Song Management (HSM).

In any event, accompanying the failed continuation vote was a separate vote against keeping Andrew Sutch (who had been set to step down regardless) aboard as chair. Simultaneously, board members Andrew Wilkinson and Paul Burger resigned.

Bearing in mind the points and investors’ far-reaching qualms, the aforementioned Naylor, previously the chair of Round Hill’s since-sold songs fund, joined HSF in the same capacity in November. Plus, another Round Hill vet, Francis Keeling, signed on to HSF’s board as a director, before activist investor Christopher Mills joined one month back.

Recent weeks’ drama hasn’t been limited to the addition of Mills, who could well clash with founder Merck Mercuriadis; the board delayed the publication of HSF’s half-year financials in December due to concerns about “the valuation of the company’s assets.”

While the seemingly underwhelming earnings information was eventually released, the episode – as well as public statements from Naylor on one side and Mercuriadis-founded HSM on the other – appears a harbinger of the broader dispute that will unfold in the approaching months.