Photo Credit: Proper Music Group
Proper Group, formerly Utopia Music, appeals against Swiss bankruptcy proceedings over an unpaid invoice.
Proper Music Group, the Swiss company formerly known as Utopia Music, has been hit with bankruptcy proceedings in Swiss court after the group failed to attend a court hearing related to a debt of 23,000 Swiss Francs ($27,360). The provisional announcement of bankruptcy was filed on Tuesday, September 24.
“We are disappointed that bankruptcy proceedings have been triggered. Our company was unfortunately unaware that legal proceedings over a minor debt were taking place, and as a result we were not represented at the court hearing,” said Proper Group in a statement to Digital Music News. “Our debt has now been settled, and we are, of course, appealing this decision. Recent positive developments in the business have placed us on track to near-term cash flow positivity, with clear prospects of profitability by 2025, so we expect to reach a favorable outcome.”
The company’s inability to represent itself at the court hearing stems from industry-wide downsizing that left no appropriate staff in Proper Group’s Swiss offices to receive and process the hearing notice. As a result, Proper is ensuring mechanisms are in place to prevent something similar happening again.
Regardless, the bankruptcy proceedings will require the company to demonstrate in court that not only has this debt been settled, but the company is more “generally solvent.” This isn’t the first financial or legal challenge faced by Proper Group this year, following an intense acquisition spree that cooled significantly and left many companies across Europe forced into insolvency proceedings.
But changes in leadership and direction at the company following a boardroom coup initiated by its key investors late last year have worked to stabilize Proper and correct its heading. Even so, the company is still dealing with significant legal and financial difficulties, including multi-million pound insolvency proceedings in the UK related to its subsidiary Utopia UK, and a court judgment related to its failed acquisition of US royalty finance firm Lyric Financial. The latter still leaves Proper Group owing over $1.8 million to Lyric’s founders, with daily mounting interest.
Proper has until October 7 to file its appeal with the Swiss courts in order to stop bankruptcy proceedings.
