PledgeMusic Is Headed for Bankruptcy, Says Crowdfunding Platform's Co-Founder
In a new letter, Benji Rogers says artist funds raised on the platform will be used to pay off the company's creditors.
The direct-to-fan music crowdfunding platform PledgeMusic, which recently came under fire for withholding payments to artists, is heading for bankruptcy after plans to sell the company fell through. The news was announced on Wednesday (May 8) by co-founder Benji Rogers in a letter to artists and a post shared on Medium.
“I am sorry to say that the sale process that I have been speaking to you about over these last weeks and months for PledgeMusic was unsuccessful and that the buyers have withdrawn," said Rogers in the letter.
The result of the unfulfilled payments left many musicians who had crowdfunded on the platform unable to deliver promised merchandise to those who had given them money. Now it appears those funds will instead be used to pay off the company’s creditors.
“The company will go into administration at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved," Rogers continued. "This will include all of the artists who are owed money.”
“Administration” is the equivalent of bankruptcy in the United Kingdom, where the company is based.
Rogers continued by telling artists that he would let them know "as soon as I know" how they might themselves register as creditors in order to receive the money they're owed. He noted that he is "not yet certain" whether FRP, the company named in previous reports as the administrator, would ultimately be appointed as such.
He also added a link for artists to download their "fan data" from the site.
PledgeMusic acknowledged its issues paying artists earlier this year and asked for a three-month grace period when Rogers returned to the company to help correct the issues. No details have been given about causes leading to PledgeMusic's financial insolvency, but a former employee told Billboard in January that artists' crowdfunded money had gone to fund ongoing operations instead of holding it “on account.” Last month, the company's subsidiary NoiseTrade was acquired by Paste Media.