If you’ve got a few thousand dollars rattling around down the back of your sofa here’s a fun thing you could do with it: buy Utopia Music, the former darling of the music tech sector that claimed it could “fix” the “broken” digital music supply chain, promising “fair pay for every play”.
The last remaining assets of the ill-fated music tech vapourware unicorn are up for sale via the bankruptcy office in Switzerland that was tasked with winding up the company.
The choice parts - if you can call them that - are currently on offer for a mere $7500 and are - according to documents seen by CMU - likely to be snapped up by the company’s former chair, Aussie money man John Mitchell, under whose watch Utopia finally fell apart.
That’s quite some way away from the supposed valuation of €2.5 billion that was hyped up by various industry commentators back in the day, and will doubtless leave investors who pumped tens of millions of euros into the business enraged, alongside the hundreds of staff who were screwed over by the company as it lurched from crisis to crisis.
As seems to be the case for so many other frothy music tech startups - including Crowdmix and its plastic cow and helter-skelter equipped office, or Pollen and its Ibiza excesses - Utopia lived it large, hosting, at its peak, a lavish “cult-like” all-staff party in Mallorca where wide-eyed staffers processed through ranks of drummers lit up in Utopia’s trademark hot pink to grip and grin with the company’s top executives.
That party happened just months before investors lost confidence and the company began to unspool as it ran out of money.
The rise and fall of Utopia
Up until then, and helped along by various music trades’ breathless puff pieces, Utopia had snapped up anything shiny that came across its path, making acquisitions left, right and centre across the music industry, with - former staffers say - no apparent clear vision of how they would be pulled together into a coherent strategy or functional business.
Alongside acquiring a string of companies, Utopia also lured in a high octane team of top music business talent, making “crazy” offers and dishing out fancy job titles to bring people on board, with one former exec telling CMU that “everyone seemed to be a VP”.
To accommodate its growing team the company splashed out megabucks on super-prime office space including a five storey Eighteenth Century mansion in London’s Soho Square. For its Swiss HQ the company leased a hip concrete warehouse-style loft tricked out with miserable looking monstera plants and drenched once more in Utopia’s eye-popping hot pink.
Pride of place was given to a monstrous faux Louis XV golden and pink velvet throne - acquired, former Utopians say, by the company’s speed-boat-loving svengali and formerly convicted embezzler Peter Löhr.
That throne became the centre-piece of a series of awkwardly-posed executive portraits that looked like they took place - in the words of one company advisor - in “an upscale knocking shop”, and epitomised for many staff the company’s increasing detachment from reality.
Behind the scenes things were not so rosy. The challenges of integrating half a dozen complex and disparate music tech businesses into one entity were beyond the capabilities of the company, and former staffers tell stories of being hired only to realise that very few people in the organisation knew what needed to be done, with new hires spending weeks floating around trying to find something - anything - to occupy their time.
Normally po-faced Swiss bankers, seemingly bewitched by the glamour and excitement of dabbling in the rare business of rock’n’roll, produced a series of increasingly bizarre investor decks, claiming that in the blink of an eye Utopia would be commissioning on gross revenues of the entire music business and then some, with the revenue streams of the company’s various acquisitions being ‘creatively’ represented to bolster the increasingly ludicrous valuations the company needed to raise cash.
The founders - ousted in a boardroom coup led by a group of investors whose eyes had been opened to the extravagant spending and lack of clear direction - were replaced by a succession of short-lived CEOs and other C-suite appointments - some of whom were let go before they’d even had a chance to be photographed on the Utopia throne.
Enough was enough said the investors. Subsidiaries were liquidated, staff let go - some apparently fired by Löhr by phone from behind the wheel of his speed boat as he bounced merrily across the Swiss lakes. Others were left high and dry, with promises of months of back wages owed broken and doctored pay-slips sent to employees.
A plan to save Utopia
Finally, a hero came along in the unlikely shape of self-professed finance whizz John Mitchell, a no-nonsense, shoot-from-the-hip, straight-talking Aussie money man who runs his finance brokerage Mitchell Asset Management out of an office above a nail salon in a Melbourne suburb. Mitchell’s mantra, he told CMU proudly, was “cut the bullshit and follow on with facts”.
Mitchell had a plan, and that plan, he said, was the huge opportunity for Utopia to play a pivotal role in the future of the music business as he saw it. Unfortunately the future of the music business as he saw it involved - in his own words - kids buying P Diddy skins in Fornite.
That comment - coming just weeks after Diddy was embroiled in the sexual exploitation scandal that culminated in him being charged and imprisoned - seemed remarkably ill-judged for a man trying to resurrect a failing company.
The actual future of Utopia involved shutting down everything, selling off anything that wasn’t nailed down, and going round investors with a begging bowl telling them it was all or nothing: cough up enough cash to save what’s left or see the whole thing go down in flames.
The money raised would be used to refocus Utopia to create a music tracking engine for gaming platforms, described by a technologist working for Mitchell as “the ability to track the consumption of music physically in the actual game engine in 3D space”, equipping games with “technology to basically understand the difference between you hearing background noise and then you definitively hearing what is music”.
The company had “developed this technology called IPx”, added the same person. “We’ve actually built it out in demo status. So we know it works. This isn’t just vapourware!”
Like Diddy, things went from bad to worse.
Bankruptcy - and apparent confusion over what Utopia actually owned
With no staff left in Switzerland to open the post, a bill from one of the company’s many law firms went unpaid and the company was placed into bankruptcy as a result. “An unfortunate mishap” said Mitchell at the time, and one that was sure to be resolved.
Needless to say, it wasn’t, and the Swiss courts took control of the company and its few remaining assets.
That bankruptcy is now nearing its final stages and, according to documents obtained by CMU, the remaining assets of Utopia are up for sale - though quite what the company owns and exactly what is up for sale is, at best, a little vague.
After conducting an interrogation in November 2024, the Swiss bankruptcy court was able to establish that Utopia had various “shareholding’s in subsidiaries abroad”. Alongside that, the company had provided a written overview of its assets in August 2024, when the bankruptcy proceedings were first filed, listing out companies it held a stake in.
That overview “provides information on whether the listed companies were still operational, inactive, founded only for the purpose of employing employees or liquidated on 19 August 2024”, and also notes that in the company’s “interim balance sheet as at 30 June 2024, the total amount listed under the item ‘investments in subsidiaries’ is CHF 12,380,064.00, the same as in the unaudited annual balance sheet as of 31.12.2023”.
It is, continues the bankruptcy office, “therefore unclear whether this item also covers subsidiaries that were already recorded as liquidated in the overview of 19 August 2024. Since the annual financial statements for 2023 remained unaudited and we do not have a breakdown of the investments in subsidiaries, the report on the 2022 annual financial statements represents the last audited overview”.
“As of December 31, 2022, a total value of CHF 86,428,384.00. The list includes various subsidiaries that were already liquidated before the present bankruptcy”.
In other words, the last properly reliable information the Swiss bankruptcy office is working from appears to be audited financial statements from the end of 2022 - just after the company’s acquisition spree and before the full scale of the incoming disaster was realised.
That CHF 86 million figure would, therefore, have included the company’s big ticket acquisitions including Sentric Music, subsequently sold by Utopia to Believe for €47 million; Lyric Financial, an acquisition that cost the company $8 million but ended up in court after Utopia botched the deal and failed to pay the full sum due; UK physical distribution businesses Cinram Novum and Proper; digital service Rostr, and artist and label services company Absolute.
By the time of Utopia’s bankruptcy only Lyric Financial and the two physical distribution businesses were still under Utopia’s control, with both the distribution companies entering liquidation after Utopia hit the wall, cash from Switzerland being necessary to keep those businesses open.
Cinram - by that point named Utopia Distribution Services - was snapped up by its landlord DP World, the Dubai royal family-owned company best known for unlawfully sacking nearly 800 staff of its subsidiary P&O Ferries. The other distribution business - Proper Distribution - was rescued by Artone, and became a key part of that group where, by all accounts, it is thriving.
In reality, at the point the bankruptcy office in Switzerland took control of Utopia, there was very little left. And, says the bankruptcy office, they can’t even be sure that they’ve accounted for everything, saying cautiously that “the bankrupt may be the owner of other subsidiaries domiciled abroad whose recoverability cannot be assessed”.
Definitely not confusing at all. In fact, it seems that all the companies Utopia had acquired may not have been included in the written statement, with the bankruptcy office being notified by French company GIBBI SAS that Utopia also owned shares in Delaware-registered Securerights Inc. GIBBI is run by Jean-Francois Bert, CEO of Securights, who was also once Utopia’s head of UGC Royalty Collection.
However “the bankruptcy office has no other documents from this company except for the Certificate of Incorporation of Securights Inc filed by GIBBI SAS, the income statement for January to April 2024 and the balance sheet as of April 30, 2024”.
Following the notification by GIBBI, “Securights Inc will be listed as an active company in the overview of [Utopia] companies as of August 19, 2024”.
However, cautions the bankruptcy clerk, “the value of the investment and the legal situation are not known. This undertaking has not yet been listed in the report on the 2022 annual financial statements available to us. The bankruptcy administration therefore offers no guarantee for the continuity, intrinsic value and transferability of the shareholdings”.
John Mitchell looks set to control remaining pieces
As for the other assets of the company, it looks likely that the man under whose watch Utopia fully unravelled - Aussie finance guy John Mitchell - will walk away with them for the knock-down price of $7500. Though, not, sadly, the pink and gold throne, which sources say was disposed of earlier on.
What does remain includes Quantone - a “semantic music metadata” company - and a number of Utopia-named subsidiaries around the world: Utopia Management AG, another Swiss company of which John Mitchell is the only director, and which - curiously enough - was put into liquidation just days ago on 25 Oct; Utopia Music Holding (US) Inc, which appears to have been used as an acquisition vehicle for US deals; and Utopia Music Australia, the purpose of which is unknown.
The last remaining notable asset of Utopia - Lyric Financial, the US-based royalty advancing company that worked with distributors including TuneCore and was subject to a botched acquisition by Utopia, which ended in a court judgement compelling Utopia to pay the money it owed - seems also set to fall under Mitchell’s control.
Missing from that list is one notable Utopia acquisition - the Quincy Jones-backed Belgian “emotional AI” music analysis and tagging company Musimap. Sources say that Mitchell acquired the assets and IP of Musimap some months ago.
“Mitchell Asset Management Pty Ltd is bidding a total amount of $7500.00 for these inventory items” says the bankruptcy document CMU has seen. “Due to the unclear factual and legal situation, the bankruptcy office does not assume that a realisation of the shareholdings would be possible in any other way”, continues the letter, adding that “It is therefore probably in the interest of the bankruptcy estate to accept the purchase offer of Mitchell Asset Management Pty Ltd”.
Under Swiss law creditors of a bankrupt company have the right to submit better offers for any assets, and the bankruptcy office notes that “higher offers for the private sale of the shareholdings must be submitted in writing to the bankruptcy office” - Zug, P.O. Box, 6301 Zug, Switzerland - “by 30 October 2025 at the latest. Bids submitted late will not be considered”.
Why does Mitchell want to buy a company he trashed?
Quite why Mitchell wants these assets is anyone’s guess, though having claimed to have raised around $6 million in an escrow account from investors for ‘Utopia 2.0’ shortly before bankruptcy proceedings, it’s possible that he’s going to give his P Diddy skins pitch a shot.
Or, perhaps, he sees value in the Lyric royalty advancing business, an area that he previously said was an extension of his existing business interests in Australia.
Indeed, despite the bankruptcy of Utopia - which was rebranded to Proper Group just before the company collapsed - Mitchell Asset Management is still touting the “Proper Music Royalty Accelerated Advance Fund” on its website, saying that “Proper Group is a Swiss music fintech that delivers transparent, data-led solutions for labels, publishers and distributors to monetising undervalued music catalogues”.
However Mitchell was particularly scathing of Lyric, trashing the company’s business and reputation in a call with CMU last year when Utopia first entered bankruptcy, describing the company as “rubbish” and its founders as “idiots” and claiming that Lyric’s “automated solution… is just a couple of PowerPoints and pretty pictures… there was nothing there. It wasn’t automated”.
“We were sucked in”, he added. “I couldn’t understand why we paid $8 million for something that never made a cent” - allegations which were robustly refuted by other people with detailed knowledge of Lyric Financial’s business.
With that in mind it seems strange that Mitchell would bid for Lyric - which is apparently the only meaningful asset in the clutch of companies he is trying to acquire.
On the same call Mitchell gloated that if Utopia survived bankruptcy the money owed to Lyric’s founders would be paid as “a compensation dividend that the court will decide - and the court will decide that in consultation with us. So the maximum they’re going to get is 10%. You can take your $1.9 million, call it $2 million. The maximum they’ll get is two hundred grand in cash. They’re idiots. Lyric specifically have tried to bankrupt us externally, forcing us into a corner. So they’ve got exactly what they wanted”.
Could the acquisition attempt in fact be driven by spite, a part of Mitchell’s apparent grudge against the founders of Lyric - a $7500 “fuck you” to people he blames for the collapse of Utopia?
The generous view would be that perhaps - somewhat optimistically - Mitchell thinks he may be able to turn things around. Though what is possibly even more optimistic is that anyone in the music industry would want to do business with the company formerly known as Utopia Music a second time around - or the team behind it.