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Creditors owed £22.5m after Festicket collapse

New financial documents show half a dozen companies were owed in excess of £1m when the platform entered administration last month

By James Hanley on 18 Oct 2022

Festicket: 82% of festivalgoers ready to return to live events

Festicket owed more than £22.5 million to creditors at the time of its collapse, according to new documents.

The London-headquartered festival discovery and booking platform, which acquired Event Genius and Ticket Arena in 2019, entered administration last month after attempts to rescue the company as a going concern failed.

A new Companies House filing shows a total of £22,560,175 in unsecured debts. Significant creditors each owed seven-figure sums are listed as Event Horizon (£2,290,244), AEG Presents (£1,506,352) and Slammin Events (£1,346,679) in the UK, Spain’s Mad Cool (£1,516,613), and Australia’s Festco (£2,359,827) and Lost Paradise (£1,580,292).

In addition, more than 20 firms were owed six-figure sums including Amnesia (£918,309), Primavera Sound (£314,168) and Andalucia Big Festival (£184,574) in Spain; Australia’s Grapevine Gathering (£703,113) and The Hour Group (£104,704); Portugal’s Everything is New (£223,807), MOYG (£180,775) and Conquistapadrao (£141,571); Cosmopop (£284,341) and Loft (£211,256) in Germany; and US-based Float Fest (£361,492) and Danny Wimmer Presents (£111,329).

Others creditors include the UK’s NCLF (£221,991), Motion & The Marble Factory (£201,683), Hospitality D&B Events (£415,801) and 2 Four Six Marketing (£112,050); Croatia’s Electronic Events (£328,337); GMED Projects, Malta (£143,659) and Malta Tourism Authority (£115,191); Loveland Events (£247,122) in the Netherlands; Movement Entertainment (£182,166) and SAND (£164,416) in Italy. HMRC, owed £298,000, is named as a preferential creditor.

The firm’s credit card processor, Stripe, has advised that it holds £7.69m across multiple currencies but “the level of any recoveries in relation to this sum are currently uncertain and will depend on a number of factors”.

In a statement outlining its proposals, administrator ReSolve Advisory adds: “We have received communication from a number of promoter creditors who are asserting that the net realisations from their ticket sales were to be held in trust for them by the company. Our understanding is that the company did not segregate or ringfence any assets for the benefit of specific parties.”

“We considered that a pre-packaged administration sale of the business and certain assets of the company as a going concern would result in the best outcome for the company’s creditors”

Ticketing exchange Lyte announced earlier this month that it had acquired Festicket and Event Genius assets and pledged to protect Festicket employees and find “ways to reconcile and rebuild with affected promoter clients”. Lyte’s clients include North American festivals such as Life Is Beautiful, Pitchfork Music Festival, BottleRock and Baja Beach Fest.

ReSolve’s Cameron Gunn, Simon Jagger and Lee Manning, who are overseeing Festicket’s administration,  pursued a “pre-pack” sale – whereby a firm’s business and assets are immediately sold by administrator under a sale arranged before the administrator was appointed.

“We considered that a pre-packaged administration sale of the business and certain assets of the company as a going concern would result in the best outcome for the company’s creditors,” says Manning in the report.

After marketing Festicket to “a range of industry specific parties”, a deal was struck with Lyte, which acquired the company’s business and certain assets for £100,000.

“We understand it is the purchaser’s intention to carry on the business of the company,” adds Manning. “We expect that this will reduce the risk of future event cancellations in relation to events for which tickets have been sold, and therefore improve the overall outcome for creditors.”

“The company’s systems were challenged by the new requirements created by the pandemic”

Founded in 2012 by Zack Sabban, Jerome Elfassy and Jonathan Youne, Festicket also ran offices in the US, the Netherlands, Germany, Portugal, France and Australia. The company recorded losses of approximately £11.3 million and £8m in the 2019 and 2020 financial years, respectively.

“Following the onset of the Covid-19 pandemic in March 2020 and the resulting lockdowns, social distancing and restrictions on travel, the company experienced an unprecedented level of ticketing refunds and deferment requests due to the multiple event cancellations and a reduction in consumer confidence,” states the document.

“The company’s systems were challenged by the new requirements created by the pandemic. This was further exacerbated by the integration of the Event Genius and Ticket Arena platforms, which had not yet been completed. As a result, the company’s financial and internal reporting systems became increasingly reliant on manual calculation and input.”

 


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