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Utopia declares second R&D business bankrupt
By Andy Malt | Published on Wednesday 26 July 2023
Following the news that Utopia Music’s UK R&D company has called in the liquidators, CMU has now confirmed that the group’s Finnish R&D company – Utopia R&D Tech Finland OY – has also been placed into bankruptcy.
Utopia co-founder and CEO Mattias Hjelmstedt confirmed the latest downsizing at the music firm late last week via an internal memo. He told employees that the company was “consolidating” its R&D offices in order to create a “leaner and more efficient setup”. As a result, he said, its “relatively small” R&D offices in the UK and Finland would be wound down, leaving one in Sweden remaining.
However, yesterday CMU learned that the company that employed the UK R&D team has actually been put into liquidation. And earlier today we discovered that the Finnish company has likewise filed for bankruptcy. A filing with the Finnish Company Registrar on Monday states that “the business operator has been declared bankrupt” and then confirms the “commencement of bankruptcy proceedings”.
This approach is likely to impact the employees who are being made redundant as a result of this latest round of downsizing. Sources close to the business have told CMU that staff employed by the UK R&D division were expecting to be paid yesterday but were instead instructed to speak to the liquidators to claim wages they are owed.
A spokesperson for Utopia previously confirmed the liquidation of the UK company to CMU, stating: “Unfortunately, we could not maintain the UK entity’s sustainability, which is why we have entrusted it to the liquidators. Nevertheless, we remain committed to delivering services to the music industries through our other ten operational entities”.
Paperwork filed with the Finnish companies registrar on Jun 29 2023 shows that Utopia R&D Tech Finland OY declared a turnover of €8.95 million in 2022 and paid out €5.15 million in wages and other employee costs during this period. It declared a gross profit of €562,163.91 at the end of 2022.
The company accounts also record nearly €2.6 million in total short-term receivables (amounts owed to the company) of which €2.53 million were noted to be receivables from companies within the same group. “Short term” in this context is generally understood to be amounts that would be paid within twelve months.
When asked whether Switzerland-based parent company Utopia Music AG was solvent and able to meet its current liabilities a spokesperson for the company said: “As a principle, we – as a non-listed company – do not answer questions regarding our financials as they are subject to external audit and shareholder approval. However, part of the reason that the R&D entities in the UK and Finland were closed down was to safeguard our global operations”.
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