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Rallying call for Festicket creditors

Promoters owed money by collapsed festival package company Festicket are being urged to contact administrators ahead of Friday’s (2 December) deadline.

The London-headquartered event discovery and booking platform had debts of more than £22.5 million when it went bust in September. Six firms were each owed in excess of £1m, with a further 20-plus creditors owed six-figure sums, according to documents filed with Companies House.

Administrator ReSolve Advisory said previously that despite several promoters being under the impression the cash from their ticket sales would be ringfenced by Festicket, that does not appear to have happened.

“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,” it said. “Our understanding is that the company did not segregate or ringfence any assets for the benefit of specific parties.”

At the request of administrators, the Insolvency and Companies Court has ordered that any creditor asserting that its monies were held on trust by Festicket should notify administrators of its “trust claim” along with an estimate of its value by no later than 4pm on 2 December. Following an initial meeting on 17 November, a second directions hearing is expected to take place at the London court on 9 December.

“If you were led to believe the money from the sale of your events was to be held on trust by Festicket then you must notify the administrators by the aforementioned deadline”

A letter circulated around the industry, seen by IQ, puts the number of promoters owed money by Festicket as “at least” 105, “some of whom are asserting trust claims whilst others are suggesting they are simply creditors”.

“If you were led to believe the money from the sale of your events was to be held on trust by Festicket (or any of its other trading names) then you must notify the administrators by the aforementioned deadline,” it adds. “Any such respondent must also notify the administrators if you intend to attend the second directions hearing and whether you intend to oppose or support the main application.

“Please provide any such information to [email protected] as soon as possible and in any event by the deadline.”

Any promoter wishing to join current and potential future litigation is advised to email [email protected]

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, which acquired Event Genius and Ticket Arena in 2019, recorded losses of approximately £11.3 million and £8m in the 2019 and 2020 financial years, respectively.

US-based ticketing exchange Lyte acquired Festicket and Event Genius assets for £100,000 in September and pledged to protect Festicket employees and find “ways to reconcile and rebuild with affected promoter clients”.

 


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Pollen report reveals enormous debts

New documents have laid bare the financial collapse of UK-based music, travel and experiences start-up Pollen.

Pollen organised artist-curated weekenders such as a Bring Me The Horizon four-day festival in Malta, the Unruly Culture Splash Weekender in Croatia with Popcaan, Diplo’s Higher Ground festival in Cabo, Mexico and Justin Bieber & Friends in Las Vegas, US.

According to a recent Companies House filing by insolvency specialist Kroll, Pollen’s parent company Streetteam Software Limited owed £75 million (£59.4m unsecured) to creditors when it fell into administration earlier this year – just three months after raising US$150m in new funding. The group recorded pre-tax losses of £52.4m, £42.7m and £57.4m in 2019, 2020 and 2021, respectively.

“Trading was significantly impacted due to Covid-19 where a number of events had to be rearranged and cancelled,” states the filing. “This further impacted on cash flows due to the level of customer refunds that fell due.”

Founded in 2015 by brothers Callum and Liam Negus-Fancey, Pollen’s biggest creditors were Luxembourg-based investment firms Sienna Capital, owed £21,494,200, and Global Growth Capital, which was owed £18,654,365.46. Other seven-figure creditors include B&Y Fund (£1,321,235.21); Northzone IX (£9,272,678.90); Henry Costa (£1,540,000/£3,141,460); 101 Ways (£2,007,685.77); Back in Black Capital (£2,480,100); Generation Ventures (£1,653,400); Lets Go Crazy Holdings (£4,953,908.16) and Thoughtworks (£1,104,575).

Pollen had drafted in investment bank Goldman Sachs to help its bid to find a buyer before Kroll was appointed as administrator in August.

“The joint administrators anticipate that the most likely exit route for the company will be dissolution”

“Following turbulent trading conditions of the company’s subsidiaries as a result of the Covid-19 pandemic, the directors of the company had previously engaged Goldman Sachs to run a sales process with a view to a solvent sale of the group,” details the document. “A sale was not forthcoming and so the directors approached Kroll Advisory Limited to run an [accelerated mergers and acquisitions] process. No offers for the business were received on a solvent basis and so the directors took steps to enter the company into administration.”

It continues: “At this stage the joint administrators anticipate that the most likely exit route for the company will be dissolution… [They] have formed the view that once all the the outstanding administration matters have been finalised, and all liabilities incurred during the administration have been discharged, there will be insufficient funds available to allow a distribution to unsecured creditors.”

Pollen, which had 316 employees prior to its collapse, raised US$150m in a Series C round in April, only to let over 150 members of staff go in the UK and US a month later. Earlier, it raised over $100m in venture capital funding, while the UK government’s Future Fund also previously invested in the firm.

Shortly before the company went into administration, directors received a £2.5m bid for certain assets – later reduced to £500,000 – with administrators saying they “hope to complete the transaction imminently”.

Last week, it was reported that another UK-headquartered startup – festival discovery and booking platform Festicket – owed more than £22.5m to creditors at the time of its collapse last month.

 


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Creditors owed £22.5m after Festicket collapse

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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Kroll appointed administrator to Pollen

Insolvency specialist Kroll has been appointed administrator to music, travel and experiences startup Pollen, which collapsed just three months after raising US$150m in new funding.

Founded in 2014 by brothers Callum and Liam Negus-Fancey, Pollen organised artist-curated weekenders such as a Bring Me The Horizon four-day festival in Malta, the Unruly Culture Splash Weekender in Croatia with Popcaan, Diplo’s Higher Ground festival in Cabo, Mexico and Justin Bieber & Friends in Las Vegas, US.

However, Pollen’s parent company Streetteam Software Limited fell into administration last week, having previously engaged Goldman Sachs to find a buyer for the global business.

Kroll’s Matt Ingram and Phil Dakin will now oversee the sale of the London-based firm’s remaining assets.

“The legacy of the Covid-19 pandemic has had a devastating impact on the growth model of the group”

“Pollen has established leading global brands and is at the forefront of the evolving experience travel sector,” says Ingram. “The legacy of the Covid-19 pandemic has had a devastating impact on the growth model of the group, but the underlying concept, brands and technology that the business has established will present a compelling opportunity as the travel sector recovers. We encourage any interested parties to contact us without delay.”

The administrators have not been appointed to oversee licensees and subsidiary companies who sell the experiences through the Pollen platform.

According to accounts filed with Companies House, Streetteam recorded losses of £51.4 million in 2021, which followed a loss of £39.3m in 2020. The company recently employed more than 250 people in the UK and hundreds more across the wider group.

Pollen raised US$150m in a Series C round in April, only to let over 150 members of staff go in the UK and US a month later. Earlier, it raised over $100m in venture capital funding from investors including Kindred, Northzone, Sienna Capital, Backed and Draper Spirit, while the UK government’s Future Fund also previously invested in the firm.

Customers with any concerns can email: [email protected]

 


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Events start-up Pollen heads into administration

UK-based music, travel and experiences start-up Pollen has fallen into administration, just three months after raising US$150m in new funding.

The embattled firm’s parent company Streetteam Software Limited has called in insolvency specialist Kroll to “administer its restructuring”.

“The management team have been in ongoing negotiations with a potential buyer for the parent company but have been unable to agree to terms in an appropriate time frame, leaving the board and shareholders agreeing the best option is to restructure the business,” it says in an official statement.

Founded in 2014 by brothers Callum and Liam Negus-Fancey, London-headquartered Pollen has organised artist-curated weekenders such as a Bring Me The Horizon four-day festival in Malta, the Unruly Culture Splash Weekender in Croatia with Popcaan, Diplo’s Higher Ground festival in Cabo, Mexico and Justin Bieber & Friends in Las Vegas, US.

Pollen’s Green Light Gang collaboration with 50 Cent was recently postponed to 2023 after originally being set for this September. Record label Drumcode has also announced that its Drumcode Festival Malta will no longer be going ahead, citing “unresolved problems” with Pollen, which was responsible for providing venues, ticketing and accommodation for the event.

Streetteam says bids have already been received for its customer-facing subsidiary firms “meaning customer experiences and refunds will not be affected”.

“The holding company sells its travel experiences through its subsidiary businesses, and they will continue to trade as normal,” it says.

“The knock-on effects of Covid-19 over the last two years… together with the tech stock crash and current consumer uncertainty… put too much pressure on the business whilst at a critical stage of a scale-up’s maturity”

Last month, the company was reported to have drafted in investment bank Goldman Sachs to assist its bid to find a buyer.

According to accounts filed with Companies House, Streetteam recorded losses of £51.4 million in 2021, which followed a loss of £39.3m in 2020.

Pollen raised US$150m in a Series C round in April, only to let over 150 members of staff go in the UK and US a month later. Earlier, it raised over $100m in venture capital funding from investors including Kindred, Northzone, Sienna Capital, Backed and Draper Spirit, while the UK government’s Future Fund also previously invested in the firm.

“Despite strong growth since Streetteam Software Ltd’s inception eight years ago, the knock-on effects of Covid-19 over the last two years, which decimated much of the travel sector, together with the tech stock crash and current consumer uncertainty in light of global economic conditions, put too much pressure on the business whilst at a critical stage of a scale-up’s maturity,” adds the statement.

“The management team are working hard to get the best outcome for all stakeholders, whilst working with shareholders to find affected employees alternative positions in their portfolio of companies.”

Pollen, which was reported to have missed its June payroll and delayed its July payroll, runs two offerings: Pollen Presents, which curates experiences for customers across travel, music, and more; and Pollen+ which partners with promoters and music festivals to offer customers who book through its platforms perks at events.

 


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Concerts cancelled after UK promoter goes bust

A host of UK open-air concerts by artists such as McFly and UB40 featuring Ali Campbell have been cancelled after the promoter behind them went bust.

In a statement, Coventry-based M&B Promotions and its ticketing platform Simply Ticketing announced it was “with a heavy heart and deep regret” that it was pulling all of its scheduled shows and had ceased trading.

Blaming the impact of the pandemic for its collapse, the company said it had “successfully delivered hundreds of events all over the country” since launching in 2019. Its last programme was held in December 2021.

“The pandemic mean it’s no longer viable for us to continue trading”

“We were amongst many high-profile event organisers forced to reschedule many events due to the Covid-19 pandemic,” it says. “With vast amounts of finance already tied up with artist deposits, suppliers, venues and marketing this has put a huge financial strain on the company.

“Despite the best efforts of everyone involved, this combined with the extreme logistical and financial setbacks caused by the pandemic mean it’s no longer viable for us to continue trading. We have contacted all customers, artists, venues and suppliers to notify them of this terrible situation we have found ourselves in.”

Originally planned for last year, M&B-promoted shows set for 2022 included McFly at Lincolnshire Showground in Lincoln and Craig David at Wicksteed Park, Kettering.

According to Companies House, M&B Promotions and Simple Ticketing Ltd were both incorporated in March 2019, with Melissa Austin their sole director. Austin resigned from both as director on 14 May 2021, when she was replaced by Coventry-based administrator Pamela Murray.

 


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Fairfield Halls operator enters administration

The operator of Fairfield Halls has gone bust just days after the south London music and arts venue closed for a two-year period of refurbishment.

Fairfield (Croydon) Ltd went into administration on Monday after emailing staff to tell them it was unable to pay their redundancy settlements, reports the Croydon Guardian, and appointing Herron Fisher appointed to oversee the bankruptcy proceedings.

The Fairfield, which includes a 1,800-seat concert hall, 750-seat theatre and 500-capacity standing concert area, closed on 15 July. Its operator had favoured a phased redevelopment – allowing part of the venue to remain open throughout – but accepted an offer from Croydon Council of around £500,000 to close for two years.

Before its closure, the Fairfield received an annual council grant of £740,000.

Croydon councillor Tim Godfrey tells the Guardian it has already also paid the company a quarter of a million pounds to fund redundancy pay-outs and other expenses related to the closure. Asked why the £750,000 was insufficient to cover redundancy payments, he says: “That’s a question for Fairfield.”

 


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Music social network Crowdmix in administration

Crowdmix, a UK-based start-up positioning itself as an ‘Instagram for music’, has entered administration after burning through over £14 million in funding.

The news was broken to Crowdmix’s 130 staff yesterday afternoon, reports Business Insider’s James Cook, after the company failed to secure emergency investment over the weekend.

The company, founded in 2014 by Ian Roberts and Gareth Ingham, soft-launched an invite-only version of its app in May, not long after laying off 8% of its staff and just before Roberts departed. The app, a music-focused social network, presents users with a feed of posts from other users, including 2,000 ‘influencers’ (musicians and celebrities), and also offers music streaming capabilities through services such as Spotify and Google Play Music.

“As Google learned the hard way, there is only room for one major-scale social network”

Crowdmix raised £14m in investment last year alone, including £6.5m from property tycoon Nick Candy. In October it hired Rob Wells, former head of digital at Universal Music Group, who stated that although “initially skeptical, I quickly became incredibly excited by the scale of Crowdmix’s ambition”.

Cook reports that the company intends to sell itself as a going concern (a business making a profit without the threat of future bankruptcy) but says it may only be able to auction off its intellectual property.

Mark Mulligan’s MIDiA Research says Crowdmix “convinced itself it could build an entire new social network around music” and gives three reasons as to why that wasn’t the case: Music is “not important enough” for people to build a social network around; “as Google learned the hard way [with Google+]”, there is only room for one major social network (Facebook); and social networks are “yesterday’s technology”: “Messaging apps have replaced social networks for gen Z and younger millennials,” says Mulligan.

 


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SFX’s Totem OneLove, Stereosonic promoter, goes bust

Totem OneLove Group, the Australian subsidiary of SFX Entertainment that promotes Stereosonic festival, has declared bankruptcy.

The company, trading as SFX-Totem Operating Pty Ltd, is shown as having entered “external administration” by the Australian Securities and Investments Commission (ASIC) and confirmed to theMusic.com.au this morning that administrators have been appointed.

Totem OneLove ASIC administration screenshot

A separate company, Totem OneLove Group Pty Ltd, is currently shown, however, as still being active. IQ has contacted Totem OneLove for clarification.

Totem OneLove and Stereosonic were sold by founders Richie McNeill and Frank Cotela to SFX Entertainment, which filed for bankruptcy in February, in 2013. As of 1 February 2016 the company was owed US$10.7 million by SFX.

Stereosonic itself is on “hiatus” for 2016, although McNeill, who has since moved left Totem OneLove, said earlier this month he doubted the festival would return in 2017.