Debtors of the struggling streaming provider Quickflix have voted today to sell the company to a US-based technology company, with Quickflix set to continue trading focusing on niche sectors.
The deal will see Karma Media Holdings pay $1.3m for the Perth-based company’s assets, which include its proprietary streaming platform and a vast catalogue of DVDs.
Details on Karma are scarce, although administrator Deloitte’s report on the company lists Los Angeles based entrepreneur Erik Pence as the person behind the company.
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He will assume the role of managing director of the company which will continue to trade in the Australian market, with the majority of employees expected to be retained and those laid off receiving their full entitlements. Unsecured shareholders will receive up to 21.5c per dollar owed to them under the scheme.
Pence’s LinkedIn profile shows he is co-founder of Walla.la, a platform that allows filmmakers and distributors to distribute their content directly to digital platforms such as iTunes, as well as marketing services around them.
Karma Holdings boss Erik Pence
Amongst creditors of the company are Madman Entertainment, Icon Film Distribution, Regency Media and Twentieth Century Fox Home Entertainment.
Rival streaming service Stan is also listed as a creditor, after buying out HBO’s $10m worth of preference shares in the company, a move which had led to it struggling to make money from the stock market through a recapitalisation.
Joint voluntary administrator, Jason Tracy said: “Quickflix has encountered corporate challenges and impediments in a highly competitive environment. As Administrators we have been able to continue trading the business since our appointment, reduce costs, retain value, keep employing the majority of staff, and conduct a global sale process.
“The result is a good outcome for stakeholders. Under new control, the Quickflix business will continue to trade, 24 employees will be retained, departing or already departed employees will receive all relevant entitlements, creditors will get a return and suppliers will have the option of trading with the continuing business.
“I would like to thank Quickflix management and employees, customers, creditors and suppliers for their support.”
Quickflix was suspended from trading on the ASX earlier this year after months in a trading halt with no sign of its assets being unfrozen, as well as spiralling costs and dwindling subscriber numbers, as it slashed its marketing spend, destroying its ability to attract new users.
That is something new owners are expected to change with “building public awareness” mentioned in its proposal. It is understood to have $700,000 set aside as a war chest to help revitalise the company.
Prior to that suspension from trading it had taken part in 18 capital raisings, according to the creditor’s report.
Despite the sale the company is likely to wind up owing $4.166m.