Nearly 100 ex-employees of the music streaming service Blinkbox, formerly owned by Tesco, have issued a class action lawsuit for an estimated £10 million against Guvera Ltd and two of its UK-based subsidiaries.
The Guvera group purchased the Blinkbox music service from Tesco in January 2015.
The lawsuit, issued through the UK Employment Tribunal, seeks damages following the dismissal of the entire workforce shortly after this acquisition.
As reported by MBW, Blinkbox Music Ltd fell into administration in June, owing licensing debts to major record companies.
The lawsuit argues that the Blinkbox music service was taken from solvency (with a reported £3.5 million in the bank) to insolvency within 5 months following its sales to Guvera.
At the point of the acquisition the employees claim to have received a written assurance from Tesco and Guvera UK that they would receive redundancy payments if cut backs were required.
They allege that this agreement was not honoured.
Paul Jennings, partner at city law firm Bates Wells Braithwaite, who represents 80 of the ex-employees said: “Nearly 100 staff were dismissed without any warning and without any notice or redundancy payments.
“Aside from the appalling way in which these employees were treated, at the heart of this case is the data of 2m-3m Blinkbox users.”
Paul Jennings, Bates Wells Braithwaite
“Many of the employees are still owed wages. For a large number of these people, including those with families and mortgages, this had a devastating impact.”
He further stated: “We anticipate that there will be other claims arising from this situation.
“Aside from the appalling way in which these employees were treated, at the heart of this case is the data of two to three million users of the Blinkbox music service.
“We have no doubt that, as the case develops and the evidence emerges, customers and investors will want to understand precisely what occurred”.
Jennings is referring to the fact that it is a strange occurrence for Guvera to have paid around £4m for Blinkbox, then allowed it to fall into administration five months later.
Unless, that is, the real value in the business for Guvera was the 2m+ user database of Blinkbox.
Guvera announced in April that it had amassed more than 10m users worldwide – but it was unclear if these included ex-Blinkbox customers.
Following January’s Blinkbox buyout, two executives emerged as leaders of the Guvera UK business: Michael de Vere, who became its MD, and Guvera Chief Commercial Officer Michael Wallis-Brown.
Wallis-Brown left the UK company in March, less than three months after the buyout.
Michael De Vere followed him out the door in May.
Sources suggest these executives departed after failing to mount a successful management buyout (MBO) of the Blinkbox Music assets from Guvera’s Australian business.Music Business Worldwide
