What now for Hipgnosis Songs Fund after its shareholders voted last month for the company to be reconstructed, reorganised or wound up? Today we know a few more details about its plans, but also about some new headaches that have emerged for the music-rights fund.
The plans focus on its promised strategic review. “As part of the Strategic Review, the Board intends to appoint independent advisers to conduct due diligence on the Company’s assets,” Hipgnosis told shareholders yesterday.
“Completion of this due diligence will provide a strong knowledge base from which the Board will commence a process of identifying and bringing forward alternative proposals for the future of the Company.”
Now to the headaches. Hipgnosis is seeking a new auditor for the company’s financials, because its existing partner PwC “have indicated they will not be participating in the tender” for its next audit. That’s due at the end of March 2024.
Another concern for the company is a legal action filed against the company and its founder and investment adviser Merck Mercuriadis. Filed by whom? By the liquidators of Hipgnosis Music Limited.
That’s a company of which Mercuriadis was a director, which was wound up in 2018 shortly before he founded Hipgnosis Songs Fund. The legal action is being taken by the liquidators on behalf of the company’s creditors.
In a progress report on that process filed with the UK’s Companies House in July 2023, the liquidators – Quantuma Advisory Limited – said that they had received claims from unsecured creditors totalling just under £4.7m.
“Hipgnosis Music Limited alleges a diversion of business opportunity from Hipgnosis Music Limited (of which Mr Mercuriadis was previously a director) to the Company and the Investment Adviser and also alleges that the Company unlawfully assisted Mr Mercuriadis with, or received, this alleged diversion,” said Hipgnosis Songs Fund about the legal proceedings.
HSF said that the company and Mercuriadis deny the claims and plan to vigorously defend them, but added that “the Company is not insured as to the costs of dealing with this claim”. It’s an unwelcome distraction for the firm as it battles to secure its future with a new strategy that shareholders will accept.
Tools: platforms to help you reach new audiences
Tools: Kaiber
In the year or so since its launch, AI startup Kaiber has been making waves,…
Read all Tools >>