Administrators for collapsed events and ticketing business Pollen have revealed that the company owes more than £78.6 million, including £4.5 million to recruiters and management consultants and £150,000 to a private jet charter firm.
The Pollen business originally grew out of two companies – The Physical Network and We Represent – both of which used ‘peer-to-peer marketing’ to sell tickets to events and especially festivals. That basically meant encouraging fans to promote shows and sell tickets through their social networks, earning rewards in return for their efforts.
As the business grew and rebranded, Pollen expanded its operations, putting together and selling special travel packages and premium experiences around shows and festivals, and working with various partners on specially curated events.
Despite the COVID lockdowns putting pressure on the entire events and ticketing business, earlier this year Pollen announced that it had raised $150 million in new investment, adding that the company had enjoyed “stellar growth despite the pandemic”, and that the new monies would help it build on its existing “significant momentum”.
But there were already signs that things were going wrong within the company, with ticket-buyers, suppliers and employees starting to air their grievances. There were more than 150 redundancies shortly after the new investment was announced, and those employees that remained started to talk about delays in getting their salaries.
Internally the official line was that there was a big deal in the pipeline that would address the company’s growing financial issues. However, that deal did not come to fruition and in August the main Pollen company officially fell into administration.
In a report filed with Companies House, administrators write: “The group has been loss making since it commenced trading with reported losses before tax of £57.4 million, £42.7 million and £52.4 million in 2021, 2020 and 2019 respectively. The losses have been supported by equity raises and the support of its secured creditor [Global Growth Capital]”.
“Trading was significantly impacted due to COVID-19”, they then confirm, “where a number of events had to be rearranged and cancelled. This further impacted on cash flows due to the level of customer refunds that fell due. The cash position continued to worsen and in June 2022 a winding up petition was issued by a creditor, which was withdrawn in July 2022 to allow a potential solvent transaction to continue to be explored”.
The administrators then confirm there were various efforts in early summer to find a buyer for the business, with offers sought both to buy the company as a going concern or via a so called pre-pack administration. However, in the end only one offer was made.
The report goes on: “On 9 Aug 2022, the directors had received an indicative offer for some of the assets of the company and its subsidiary company on an insolvent basis totalling $2.5 million”. Given the size of the company’s debts at that point, it was agreed by Pollen’s management, secured creditor and lawyers that it wouldn’t be inappropriate to accept that offer at that time.
As a result, the company was put into administration and new efforts were made to find a buyer for the company’s assets. But only the original proposed buyer was interested, it reducing its offer to $500,000. Though that offer included the buyer acquiring one of Pollen’s subsidiary companies, JusExperiences UK, which wasn’t part of the deal.
Ultimately the buyer offered $250,000 for the assets of the Pollen parent company, which includes its technology platform, the Pollen brand and shares in Abode Records Limited. The administrators confirm they are now in the process of finalising that deal and “hope to complete the transaction imminently”.
In addition to the pretty nominal profits of that deal, the Pollen company is due a VAT refund of £267,805 and had £280,443 in cash when it fell into administration.
However the status of the VAT refund isn’t clear. Meanwhile, the money in the bank seemingly relates to “a research and development claim made to [UK tax authority] HMRC by the company”, and various parties are now making a claim over that money, with the administrators currently consulting their lawyers about said claims.
Significant sums are owing to the Pollen parent company from other companies within the group, though the administrators say that “based on current information” they anticipate that there “will be insufficient funds to enable a distribution” to the firm’s secured, preferential and unsecured creditors.
A total of £78.6 million is owing. That money is mainly owed to financial backers, employees and service providers, which makes the collapse of Pollen different to that of another ticketing company, Festicket, where most of the monies owed were due to promoters that had worked with the company.
Pollen’s debts include the £4.5 million owed to the recruiters and management consultants it utilised, and smaller sums to other people and companies whose services the firm hired, including a hypnotherapist, a nutritionist, a consultant psychologist and a vocal coach – plus £150,000 to private jet charter firm Global Charter and £76,800 to De Vere Wokefield Estate Ltd, a luxury country house hotel near Reading.
Elsewhere, the administrators note that they “have a statutory obligation to file a report with the Insolvency Service regarding the conduct of all directors that held office in the three years prior to the administration. This report must be filed within three months of the date of appointment and the content of this report is confidential”.
“Investigations into the company’s affairs are currently ongoing”, they add. “The joint administrators also have a duty to investigate antecedent transactions which include transactions to defraud creditors, preference payments and transactions at an undervalue. Given the commercially sensitive nature of these investigations, it is not appropriate to elaborate on any potential claims at this time. An update will be provided in the next progress report”.
We await with interest any future updates. Meanwhile, in the US, a former employee recently filed a lawsuit over unpaid wages, seeking class action status for the litigation.