No Bankruptcy, No Refunds, No Liability, Pledgemusic To Liquidate All Assets
No Bankruptcy, No Refunds, No Liability. PledgeMusic Files Wind Up Order, Absolving Executives of Any and All Wrongdoing. You’re wondering how they’re going to do that?
PledgeMusic is pulling a sneaky disappearing act.
Aiming to completely disappear into the middle of the night, the crowdfunding platform’s executives shut down the website last week.
This came months after PledgeMusic reportedly froze artists’ funds and misspent hundreds of thousands of dollars of musicians’ money to keep the site operational.
In a vague message essentially clearing the company of any liability over artists’ losses, executives wrote (emphasis mine),
“To the Artists and Fans of PledgeMusic.
“As many of you know, PledgeMusic suspended operations a number of months ago. The company continues to work with outside counsel on the most appropriate next steps, and we will update you with those specifics as we get more information.”
One popular indie band has vowed to take executives to court. Others have simply expressed anger, while others have apologized to fans.
Disappearing with artists’ money, this time with the court’s approval.
In May, PledgeMusic’s embattled co-founder Benji Rogers wrote that the company would soon go into administration – the British equivalent of bankruptcy.
After being widely lambasted on social media for breaking his promise to return artists’ money, Rogers wrote (emphasis mine),
“I went back into [the company] just over three months ago as a volunteer to try and help the board and team turn around and sell the company, but I am sad to report that this effort has not met with success and that PledgeMusic will shortly be heading into administration.”
It appears the company’s plans have changed.
Instead of heading into administration, the British crowdfunding platform had a new strategy in mind.
An eagle-eyed user found a petition to wind up PledgeMusic in The Gazette.
Earlier today, the Royal Courts of Justice granted the wind-up order. In effect, the approval will send the company into compulsory liquidation. The court will soon appoint an Official Receiver (OR), who will liquidate all of the company’s assets.
So much for getting artists’ money back.
Attending the hearing, pro-indie activist organization UK Music quickly slammed the order.
In a letter to Business Minister Kelly Tolhurst, Deputy CEO Tom Kiehl urged the government to step in.
“Many musicians across the UK relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings, and other costs. The winding up of this company represents an entirely unsatisfactory development for the many music fans and creators who have invested so much into projects through this scheme.
“I ask you to again consider the merits of a ministerial referral to the Competition and Markets Authority to investigate what went wrong with this case.
“I would also like to ask you to consider taking up the case with the Financial Conduct Authority, which holds responsibility for regulating certain types of crowdfunding, to consider the activities of PledgeMusic and whether there have been any regulatory breaches.
“Furthermore, I would like to ask for a meeting with you to consider further possible Government interventions to ensure the issues which have arisen from PledgeMusic can never happen again.”
UK Music isn’t the only group infuriated with the sneaky wind-up order.
In a lengthy post, L7 vowed to take the former company’s executives to court. Calling the crowdfunding platform a fraudulent scheme, the band wrote,
“To give a brief summary for those not familiar with the Pledge Music scam, in a nutshell, the funds that many bands and their supporters raised through the crowdfunding platform were absconded by the company with zero accountability and unreturned legal appeals. Their site is no longer live and they are filing for bankruptcy protection in the U.K.
“It’s been a disappointing, time consuming, and expensive mess for all artists and fans involved with this Pledge Music FIASCO.”
L7 also vowed to remain silent.
“We do not wish to further comment on this situation as we do not want to be the face of being screwed over. L7 are bigger and mightier than this mess. The only time we will speak of this again will be in a courtroom.”