The former direct-to-fan music platform PledgeMusic closed earlier this year, when it filed for bankruptcy after owing the numerous artists on its platform up to $3 million. According to bank-appointed receiver handling the liquidation of the company however, the artists are “unlikely,” to see refunds from the company, which was $7.4 million in debt when it entered liquidation
“I do not anticipate that I will need to contact you again because there is unlikely to be a payment to creditors in this case,”states the report from official receiver S. Rose, dated Oct. 21, 2019 and obtained by Variety. “If that changes I will contact you.”
Numerous artists such as L7, Failure and Gary Numan had used the platform to help crowdfund projects, yet in each of those cases, the platform had either missed payments or sent in late payments. Numan had to switch his crowd sourcing campaign to another service due to the platform’s late payments to artists. Failure told its fans to call their bank to get refund on their pre-orders from their latest album release. L7 took a more direct route, and stated that they will deal with PledgeMusic “in the courtroom.”
Threats of legal action may prove insufficient however, as legal advisers have “indicated that Pledge monies were not trust monies,” meaning money paid by fans belonged to Pledge, not the artists, even though the service stated it was a channel for fans to pay musicians for albums, music, merchandise and even private performances directly.
Despite this, the platform is still being investigated further, which may provide an opportunity to the artists harmed by the service. “The board members attribute the insolvency of the company to the commission charged being insufficient to meet its expenditure. Enquiries into the company’s affairs and reasons for its failure are continuing,” the report reads.
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