Razorgator’s offices in LA on Tuesday. A few people were in the building, and the person who eventually answered the door directed enquiries to financial advisory firm Sherwood Partners.
Ticket marketplace Razorgator has ceased operations and is seeking assignment for the benefit of creditors status in California and will soon begin a “formal insolvency process.”
On Tuesday, Razorgator laid off the staff at its Marina del Rey headquarters and locked the doors, announcing it was operating on a limited basis with its consumer retail operations suspended and no ticket inventory available on its website.
Razorgator has brought on David M. Johnson with financial advisory firm Sherwood Partners to assist with what he is describing as the “formal insolvency process.”
According to Johnson, Razorgator is filling for an assignment for the benefit of creditors, a legal process in many states including California for troubled and insolvent companies in a proceeding governed by state law rather than federal bankruptcy law. The process gives Razorgator and its investors greater control over the winding down of the company, although it does not give Razorgator an automatic stay against legal claims. Like a bankruptcy, the process typically indicates a default to creditors, which in this case include members of the National Association of Ticket Brokers, a scalper lobbying group.
Johnson said information about filing a claim against Razorgator will be “sent out in the next one to two weeks.” Johnson can be reached via email at [email protected]
It’s unclear how many ticket brokers have inventory on the site, although Razorgator’s liquidity crisis was enough to prompt the NATB’s Executive Director Gary Adler to send an advisory to members, detailing its attempt to manage the crash. The NATB was largely panned for it’s ineffective response to the crash of Scorebig in 2016, which resulted in large six-to-seven-figure losses for its members.
You can read Adler’s letter to members describing the insolvency below. Amplify is still seeking answers to gauge what this latest scalper meltdown means for fans and will update readers when more information becomes available.
Date: February 26, 2018
To: NATB Members
From: Gary C. Adler
On Friday, based on concerns expressed by certain NATB Members, I sent a letter to RazorGator about unpaid accounts. A copy of that letter is attached here. The letter references previous correspondence with RazorGator wherein NATB asked it, along with other exchanges, whether it would pay NATB Members on confirmation of a sale; and if not, what measures they could put in place to protect NATB Members. At that time, RazorGator responded: “Razorgator’s standing payment terms are based on delivery of the tickets to our customers.” As an NATB Member, you received a report as to all of the responses (or lack thereof) to the letters sent to exchanges. A copy of that report will be sent via separate email.
Friday’s letter gives RazorGator until the close of business today to respond. As of now, there has been no response. However, it has been reported that RazorGator is no longer listing tickets and that employees have sent messages that raise concerns. We will relay any information we receive from RazorGator, or about RazorGator, as soon as it is received.
In the meantime, if you have an outstanding account receivable from RazorGator, please send me an email at [email protected]
regarding the amount of the account receivable. Please also point out what portion of that account receivable is for tickets that have not yet been delivered. As to those tickets, we recommend that you do not invalidate tickets.
NATB’s guidance to its Members is the following:
- For tickets currently delivered to end users for which the NATB seller has NOT been paid, NATB recommends its Members do NOT cancel these tickets.