Bandbox Bust: Customer Reacts to Latest Email Notice
With three albums on order, I dig into the latest communication from Bandbox relating to the sale of assets and the Assignment for the Benefit of Creditors.
As I write this, I’m reflecting on my journey over the past few years. I stepped away from the comforts of my home office and into a little local brewpub that’s quickly becoming a favorite of mine.
In an upcoming video, I’ll be touching on the history of FensePost and the journey I have gone on from its beginning all the way back in 2006 to where I am now and where it’s going.
Today is a little different though. I’m reflecting on my journey with Discogs, which now extends to over a decade.
When I first created a Discogs account around 12 years ago, some of the first albums I added to my want list were from a Seattle indie rock band called The Long Winters. Released on Barsuk Records — the same label responsible for Phantogram, Death Cab For Cutie, Nada Surf, and more — they had already been out of print for a number of years.
This all changed last fall when Bandbox announced they were partnering with Barsuk to reissue the band’s entire library on colored vinyl. I quickly pre-ordered the group’s three studio albums (I passed on the EP).
A quick aside: Not long after the Bandbox announcement, Barsuk announced they’d be reissuing the Long Winters’ catalog on black vinyl as well.
The albums were supposed to ship out in late December.
“Production delays” occurred per an email from Bandbox, and the date was pushed to late January or early February.
Then, a few months ago, I — along with about 6,000 others who had outstanding and unfulfilled orders from Bandbox — received an email announcing that Bandbox had filed for an Assignment for the Benefit of Creditors.
I talk about this and how it differs a bit from a bankruptcy in the video below.
This video was based on that initial email announcement, and included some reactions based on my understanding of what was going on. I tried to answer some common questions, noting that, and this is an important distinction to make:
I am not a lawyer.
None of it should be taken as legal advice.
Those distinctions apply to this post and the video I’ll be adding below once it goes live.
My read on the situation was that it was highly unlikely I would receive the vinyl I ordered. I would be out about $110-120 for the vinyl I ordered.
Surprisingly, my read might actually be wrong. Let’s dig in…
New Communication from Bandbox
This week (May 7, 2024 to be precise) customers with unfulfilled orders received a follow up from Bandbox, who now has a buyer lined up. As promised in my new video, I noted I’d copy and paste it here.
MOTION TO APPROVE SALE OF BANDBOX ASSETS
As you know, Bandbox filed an Assignment for Benefit of Creditors. The Assignee has now entered into an agreement to sell the assets of Bandbox. The Assignee has filed a motion requesting that the Court approve the sale, the distribution of the net proceeds and the final report and discharge of the Assignee. Linked at the bottom of this email you will find the documents filed in this case. The Court has scheduled a hearing on this for June 6th, 2024.
As part of the sale, the purchaser, Haughton Elevator Company LLC has agreed to facilitate the fulfillment of certain of the prepaid orders outstanding with Bandbox. To that end, Haughton has issued the following statement:
“We at Haughton know first-hand how upsetting Bandbox’s cease in operations has been. We diligently worked with Lighthouse Management Group to reach this agreement and are well positioned to make this right. Upon approval, VinylBox, our partner, will begin the process to ensure customers receive any available vinyl orders that were originally placed with Bandbox.”
Further information from Haughton Elevator Company LLC is available at https://vinylbox.co and bandbox@vinylbox.co.
As of 10am Central Time on May 8, the URL and email do not appear to be active. This, of course, doesn’t give me confidence, but I’m giving Haughton and Vinylbox the benefit of the doubt here. Hopefully that’s not foolish of me.
UPDATE: As of 4pm Central Time on May 8, the URL is now active and has a “Coming Soon” page and I realized that user error added a “.com” to the email rather than a “.co” — and I have already received a reply from VinylBox:
Thanks for the quick outreach. We're still working through our plans leading up to the hearing to finalize everything. You'll have a chance to update your address prior to us shipping anything out. We won't have access to Bandbox's former systems prior, so please do reach out again if you have any issues updating your address prior to it shipping (hopefully) this summer.
Will You Get Your Bandbox Order?
In my original video, I expressed dismay that it was highly unlikely that customers with unfulfilled orders would get their records.
Thankfully, according to this email and the attached legal documents, it looks like a decent amount of customers might receive them after all!
Within the documents, you’ll see that there are approximately 6,000 customers with outstanding orders, spanning a stunning 40 different countries. The buyer of Bandbox’s assets has agreed to fulfill what they can, which includes roughly 8,400 albums to approximately 4,300 of the customers.
That’s shocking; in a good way!
I’ll be dropping my new video here when it hits.
In my new video, I hone in on one sentence in the email: Haughton Elevator Company LLC has agreed to facilitate the fulfillment of certain of the prepaid orders outstanding with Bandbox.
Note the text I bolded. The word certain lacks much of the clarification many of us desire, and my speculation (again, not fact) is that this pertains to the following scenarios:
1. Orders of Existing Vinyl in Bandbox’s Possession
If you ordered something from Bandbox that they physically had in their possession, it’s likely that you will eventually get your order so long as everything in the email is indeed true, Haughton makes good on their promise, and the court approves the sale of Bandbox’s assets.
However, if they oversold any of their vinyl pressings, that would change the scenario.
2. Orders of Vinyl NOT Pressed
Obviously, the vinyl doesn’t physically exist and it’s unlikely Haughton will take on the burden of producing the vinyl and distributing it. While there’s always the potential it may take on those contracts, produce the vinyl, and retain and distribute the limited amount of pre-orders, I kind of doubt it.
3. Orders of Pressed Vinyl NOT in Bandbox’s Possession
My order from The Long Winters is included in this batch, and my read on the situation is actually another question. Who actually owns those records? If they have been produced, they are likely sitting in the warehouse of a manufacturing plant that held onto the product due to non-payment by Bandbox.
It appears that when and where applicable, Haughton is purchasing at least some of these assets as well. Good news for customers like myself who pre-ordered them. Bad news for the manufacturers who expended time, resources, and money in pressing them.
So sadly, not all of the news is good. I’ll dig into that below.
Will You (Creditor) Get Money Owed to You?
Again, I’m going to start this by saying that I am not a lawyer and this is not to be misconstrued as legal advice. This is just my understanding based on reading the documentation, and that if you have deeper questions about your position you should contact a lawyer for true clarification and the actual meaning of anything discussed below, just in case my understanding is a little off.
My understanding of a lien is that they go in order of priority. There is a specific order in which liens are paid out in most cases, and the first lien is typically (though not always) the bank who has specified their position as the first lien-holder.
In the legal documents attached to the Bandbox email, two large amounts are highlighted.
First is the proposed sale amount of Bandbox assets — free and clear of all liens — to Haughton Elevator Company for the amount of $165,000. Later in the documentation, we learn that Bandbox owes their bank $255,000.
My read on this is that the bank, as first in line for any money, will be awarded whatever amount remains of the $165,000 outside of legal fees due, and amounts to be paid to the Assignor facilitating the sale, and maybe some other things.
Unfortunately, this means a good chunk of people and businesses are out of luck. This includes any creditor owed money like:
Vinyl manufacturers
Bands and labels
Employees, if any paychecks went unpaid
Customers with pre-orders not manufactured
Customers with gift cards
This is super unfortunate, and it’ll likely have a resounding impact on a lot of people and a lot of businesses who fronted money they are now unable to recuperate. In some cases, it could be tens of thousands of dollars.
What do the Legal Documents Say?
There were five legal documents attached to the email, and I’ll link to them below for your own viewing.
What’s Next?
Next is the June hearing about the sale. I anticipate we who are listed as Creditors will get some communication after that, though it’s to be determined what the timeline is for the fulfillment of any orders as noted. All of that, of course, hinges on the sale being approved by the court and getting fully funded.