We are now able to report on the progress of the administration of Elastic Artists Agency Limited of which, James Tickell and Carl Faulds of Portland Business and Financial Solutions were appointed joint administrators on 7th December 2015.
Creditors can access the progress report here
The company was incorporated on 19th May 2004 and its business was to act as a music agency for artists throughout the UK and Europe.
Originally a team of just two, the company grew to employ 13 agents, 7 assistants and a 5-strong management team. The headquarters were based in London but the company also held offices in Paris and Germany with service locations in Manchester and Liverpool.
The agents, who were employees of the company, were based throughout the UK with many working from home and they were responsible for their own roster of artists and promoters.
The business model adopted by the company was that it would act as an intermediary whereby the promoter would book artists through the agents and pay to the company the deposit for the performance. The money would be held in separate client accounts.
In 2014, an internal disagreement within the company led to a number of staff leaving. One of the downsides of losing employees was that the agents would often take their artists with them to other agencies. If the artist was one of the more popular acts then this would have an immediate reduction on the company’s turnover. This was unfortunately common practise in the industry although employment contracts were drafted with the intention of dealing with this problem.
The company employed new agents however due to the loss of senior agents and an anticipated future gap in cashflow whilst the new agents became effective, the director approached the company’s bank in an attempt to secure further funding.
Unfortunately it became clear that the bank were not willing to provide any further funding and as a result the director had concerns over the future of the company.
Upon appointment the administrators immediately took legal advice over the status of the client accounts held by the company and whether they were in fact trust accounts and should be kept separate from the other assets within the administration.
The most viable solution seemed to be that a trustee was needed to be appointed over these funds to deal with the distribution to those making claims upon the monies, being artists and promoters. We were advised by solicitors that as administrators we could apply to be appointed as the Trustee over these funds. This procedure would require a Court application and an order to provide the necessary authority and to set out the terms of the assignment. We have been working with solicitors to achieve this and the application is in the final stages of drafting.