Festival package company Festicket has filed a moratorium, which typically means that struggling businesses are given formal breathing room to try and come up with a rescue plan.
According to Companies House, the Commencement of Moratorium was listed today (Wednesday) and is being processed.
The UK Government says that a moratorium means no legal action can be taken against a company without leave of the court, while attempting to save the business.
A moratorium is usually implemented to alleviate short-term financial hardship or to provide time to resolve the issues. In legal proceedings, a moratorium can be imposed on activity such as debt collection during bankruptcy proceedings.
A source told TheTicketingBusiness.com: “The company still has to pay its ongoing debts during the moratorium e.g. rent & employee liabilities, and also has to appoint someone to oversee the process i.e. a licensed insolvency practitioner, whose main job is to monitor and then evaluate whether an rescue plan will work.
“It is my understanding that the company directors are in exclusive negotiations with a third party, and this gives them some time (initially 20 days but this can be extended) to assess the situation and to potentially develop the plan for the company as a going concern.
“Unfortunately, for current clients and staff, the business may be considered beyond rescue.”
Festicket was founded by Zack Sabban, Jonathan Younes and Jerome Elfassy in 2011. The company works with festivals as official partners to provide general admission and VIP tickets to festivals around the world. These tickets are then bundled together with travel, accommodation and various other add-ons.
Sabban recently took a step back from Festicket to focus on his metaverse event company RLTY. He assumed the role of non-executive director and board member. Reshad Hossenally, founder of Event Genius and Ticket Arena (both acquired by Festicket) and Festicket’s chief operating officer, also took a step back from the three projects in June.
The news follows the reported struggles of fellow live entertainment start-up Pollen, which is facing administration after sales talks collapsed.
Festicket has been contacted for comment but has not responded to TheTicketingBusiness.com at the time of writing.