Today sees the demise of Torquing Group as a meeting of creditors takes place to put the company into liquidation. Group Action specialists Edwin Coe have been consulted by “backers” in the failed crowdfunded ZANO mini-drone project.
The Torquing Group, the company behind the ZANO project, advertised for investors by way of the Kickstarter crowdfunding platform and are thought to have amassed over £2.3 million in start-up contributions. The failure of the project and the appointment of liquidators for the Torquing Group means that many “investors” may be left out of pocket.
David Greene, Senior Partner said
“Questions of crowdfunding in failed enterprises raise significant questions of law and liability. As yet there has been no test of rights of investors in a failed crowdfunding enterprise. The issues arising from the failure of the ZANO project will have to address these questions. The Kickstarter model is that payments are made not against taking an equity stake but, effectively, by way of a pre-payment for product at a discount.
This collapse will put the crowdfunding process under scrutiny and any liabilities that may arise including those of the crowdfunding agent.
The proposed liquidators are maintaining that the “backers” are not creditors of the company and thus have no status in relation to the liquidation. Our view is that that is not right and we understand that the liquidator is considering this but did make an emergency application to the Court to advertise the meeting in newspapers to a wider audience than the addressees of the notice.”
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