After divesting multiple recently acquired businesses (Absolute and ROSTR among them) and laying off a number of employees, Utopia Music has reportedly delayed paying certain team members, and two of its subsidiaries look to have filed for bankruptcy.
These latest less-than-ideal developments pertaining to Utopia Music entered the media spotlight in a pair of reports from Complete Music Update, after the Swiss music fintech a week back revealed plans to close two R&D offices (one in Finland, the other in the UK).
In an internally circulated memo that was shared with Digital Music News, Utopia co-founder and CEO Mattias Hjelmstedt described the closures as “a necessary step to realize our long-term vision of Fair Pay for Every Play” – while opting against mentioning the initially highlighted bankruptcies. Similarly, a Utopia representative in a lengthy statement to DMN didn’t elaborate upon the precise fate of the research and development operations at hand.
According to the aforesaid reports, however, the UK R&D division has been put into liquidation, and the hub in Finland has filed for bankruptcy. When inquiring about their due pay, employees at the former division were reportedly told to speak with the liquidators. At the time of this writing, none of these undoubtedly ticked-off professionals appeared to have taken to LinkedIn to discuss their recent experiences with Utopia.
Meanwhile, different Utopia employees yet – referring specifically to those who are still part of the troubled company but excepting the teams of Proper Music and Utopia Distribution Services – are waiting to receive their owed paychecks, per the above-noted outlet.
Though it’s certainly little consolation to the workers who haven’t been compensated for their efforts, this is according to the reports not the first time that Utopia’s delayed making salary payments.
Additionally, third-party vendors are likewise awaiting the fulfillment of outstanding invoices from Utopia, the report shows – with the latter entity having reportedly responded to associated inquiries by communicating that further funding would be required to honor the relevant contracts.
Addressing the alleged failure to pay employees, a Utopia spokesperson acknowledged that “there have been some hiccups in internal processes due to our transformation efforts,” proceeding to state that “all employees are in the process of being paid.”
And when asked whether the overarching Utopia Music AG would be able to meet its financial obligations in the long term, the company somewhat noncommittally relayed that “part of the reason that the R&D entities in the UK and Finland were closed down was to safeguard our global operations.”
Worth mentioning in conclusion is that an April report suggested Utopia Music, which had previously sold off Sentric to Believe in a $51 million deal, was battling allegations of massive tax debts. Plus, at least one company is litigating against Utopia over an acquisition deal that evidently fell through.