Following on from the major announcement of the purchase partnership between Michael Gudinski’s Mushroom Group and Future Entertainment, which will see Frontier co-present the forthcoming Future Music Festival 2014, comes news this morning from the Supreme Court of Victoria that companies formerly comprising Future Entertainment have entered liquidation.
Future Entertainment legally changed the names of three of its major companies back in June, and have been transferring assets – such as trademarks and the operation of the business – into the new registered names.
Music Events Holdings Pty Ltd (the company formerly known as Future Entertainment Pty Ltd) was placed into liquidation through a court order this morning in Victoria’s Supreme Court. The company had operated flagship events Future Music Festival and Summadayze until recently, and owned the brand trademarks until only a few months ago.
Music Events Tours Pty Ltd (formerly Future Tours Pty Ltd) and Music Events Operations Pty Ltd (formerly Future Events Pty Ltd) have also entered liquidation. During today’s court proceeding, legal representatives for Future Entertainment did not dispute the application to wind up the companies.
It is unknown at this stage how much money is owed to creditors by the companies formerly known as Future Entertainment, however it is believed it may be substantial and the liquidator will now seek out creditors to assess the extent of the liabilities.
Disgruntled creditors who have anonymously spoken with Tone Deaf have revealed that Future Entertainment had told them they were planning to liquidate the companies and suggested they accept a fraction of what they were owed or end up with nothing in liquidation. It is unknown at this stage how much money is owed to creditors by the companies formerly known as Future Entertainment…
Creditors placed in this kind of situation haven’t fared so well in the past. A detailed report from The Age reveals a similar scenario from Australian promoter McManus Entertainment, who registered a new company called Andrew McManus Presents (Australia) Pty Ltd in January 2011, then changing its name to McManus Entertainment Pty Ltd, which is now the primary business. Then the Andrew McManus Presents (International) Pty Ltd company changed their name to the inconspicuous Miz Pty Ltd on July 4, 2011.
The following day, when liquidators were called in to assess, they found an “empty shell of a company” stripped of its assets, “with $4.2 million in debts and a mere $15,251 in the bank,” according to The Age. Meanwhile, the original McManus Entertainment company continued unabated by financial struggles.
The messy financial collapse of Peats Ridge Festival painted a similarly alarming story in which creditors and liquidators were left searching for scraps amidst accusations that the festival’s promoter had embezzled $1.3 million and attempted to wipe records; the fallout out from Peats Ridge is still being felt as it mires through a sticky saga.
Then there’s the case of Fat As Butter promoters Mothership Music, who entered voluntary liquidation after losing a crucial court case seeking over $400,000 in damages against Flo Rida for his 2011 festival no-show.
It is believed Future Entertainment had known they were in financial trouble for nearly a year, but decided to press ahead with Future Music Festival 2013 and Summadaye 2013 regardless. A number of the suppliers for those festivals are still owed money for their services for this year’s editions of both music events.
What assets are left in the companies is unknown, however it was revealed during a hearing in the Federal court last week that Future Entertainment had transferred all assets, including trademarks, out of an ailing company, potentially limiting the assets available to the liquidator for distribution to unpaid creditors.
The trademarks have been transferred to a company called Future Music Holdings Pty Ltd, which was registered in May this year, the day before an application to transfer to trademarks was lodged. The registered address for the company is Future Entertainment’s head office in Melbourne.
Court documents obtained by Tone Deaf reveal that Future Entertainment had been thinking about its financial position since at least October 2012. The creditors who brought the wind-up action against the company were accountants who specialise in insolvencies and who had not been paid.
An invoice found in the documents reveals that representatives travelled to Sydney in November last year to discuss the appointment of an administrator, although it is not known what the outcome of that meeting was or what was discussed.
Also present at this morning’s court proceedings were representatives from Norwest, Australasia’s largest audio service provider who have worked on a number of festivals and the Olympic opening and closing ceremonies.
Ice cream maker Cold Rock were also present, after they were awarded court costs following a trademark dispute last week, where Justice Murphy dismissed Future Entertainment’s suit against Cold Rock on the basis that they failed to turn up to three hearings on the matter, and that they no longer owned the trademarks they were disputing.
Justice Murphy ruled that Future Entertainment had treated the defendant “shabbily” and the court “with contempt,” awarding court costs to the defendant and suggesting that the transfer of the trademarks could be to avoid any legal dramas associated with the wind up action, an action reflecting the “obvious financial trouble the company is in.”
Tone Deaf spoke to The Mushroom Group about the liquidation but they had no comment.
