Viral publisher Unilad owes more than £6m to debtors and should enter administration, ruled Judge Clive Jones at the High Court of Justice in London Thursday (4 October).
The Metro, reports that Unilad owner Bentley Harrington Limited owes £5m to company founder Alex Partridge, who after years of legal action is pursuing money promised to him by the fourth largest publisher on Facebook.
Bentley Harrington has agreed to file for administration. This is despite reported investment and interest being tabled for the company by third parties.
The Drum has reached out to Unilad for comment. The ruling on the administration application will be returned on 31 October.
Today's ruling represents the latest financial challenge to Unilad after it was petitioned by HMRC in July in pursuit of unpaid taxes or debts in a separate legal action. HMRC is looking to recoup £1.5m, bringing Unilad's total debt to in excess of £6m.
On 13 September, a Unilad spokesperson told The Drum: “The situation with HMRC is being resolved swiftly.”
Earlier this year, Unilad's co-chief executive and founder Sam Bentley stepped down from his position. The company said it took "decisive and firm action" following an investigation "in response to allegations of historic misconduct made against the company". At the same time, a website called Unilad Exposed was spreading accusations about members of staff.
Unilad's statement at the time added that “claims made against the company include many false allegations and substantial inaccuracies". It did note that it has "found particular claims to be substantiated," and has "acted" but added that it will "vigorously defend its reputation against untrue allegations".
David Sefton, managing partner of Linton Capital LLP and a former barrister, stepped in as interim executive chairman to guide the company through its next few months.
With research from NewsWhip claiming the Facebook NewsFeed algorithm change did not adversely affect the reach and earnings of the company on that platform - and may have benefited it – despite popular belief, it would crush viral content producers.
Manchester-based Unilad was founded in 2010. In 2017, the Unilad Group blog claimed that more than 150 people were employed at the company. It now reportedly numbers 200.
Not long after the court case, The Drum received evidence bidders are lining up to acquire or support the socially-driven media company from liquidation.