PledgeMusic’s fall has been swift, and on Wednesday the disgraced crowdfunding site was granted a notice to dissolve the company at a hearing in London.
The company suspended operations several months ago and recently took its website offline, saying it “continues to work with outside counsel on most appropriate next steps” following a year of complaints that it was withholding payments to artists who completed successful campaigns. PledgeMusic has not disclosed how many musicians, labels and vendors it owes money to, but the number is believed to be in the thousands.
On Wednesday, the company was served with a winding up notice at the Royal Courts of Justice, located in London. The petition to wind up was submitted in June by PledgeMusic vice chairman Russell Rieger. (Winding up is the process of dissolving a company with the goal of paying off creditors, selling off stock and distributing remaining assets to partners or shareholders.)
Following the hearing, umbrella organization UK Music aired its displeasure at the development and called on UK Minister for Small Business Kelly Tolhurst to refer the case to the Competition and Markets Authority to investigate what went wrong with the once-promising platform. UK Music points out in a letter to Tollhurst that winding up PledgeMusic does not resolve the unpaid funds that artists raised from fans, or the money they invested to make those campaigns successful.
“Many musicians across the UK relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings and other costs,” wrote Tom Kiehl, deputy CEO of UK Music. “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.”
Kiehl added that he hoped Tolhurst would take the case to the regulatory Financial Conduct Authority, “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,” Kiehl concluded.