Dutch Take A Bath On Rock & More

The Austrian and Dutch small cap investment companies that bought Rock & More 2 about seven months before it went under apparently didn’t bother with due diligence before completing the deal.

Daniel Gärtner, a managing partner with Vienna-based Lenox Management, said that his company and Amsterdam-based Lavinia B.V. had been aware of the bankruptcy of Rock & More 1 and had contractually ensured that they were protected against further liabilities arising against the second company.

He said Lenox and Lavinia, which is the bigger investor in Rock & More Beteiligungs GmbH, bought the company because "it seemed to be an attractive business."

"Given the situation and the outlook presented by the management we did not engage in a detailed due diligence before purchasing the company," he said in a written response to Pollstar.

"Unfortunately things did not go as expected and Rock & More had to file for bankruptcy at the beginning of 2008. We have been aware that there was a bankruptcy [Rock & More 1] before but we have ensured that there will be no liabilities thereof.

"This indemnification clause was also incorporated in the share purchase agreement. I ask you for your understanding that we will not issue any further statements on this case until the bankruptcy file has been closed."

Gärtner has declined to comment on why his company and its Dutch partner proceeded with the deal despite widespread media coverage saying the company could be on the edge of collapse.

Rock & More 2 owner Heimo Hanserl sold the company to Lenox and Lavinia at a time when it was under close scrutiny from Dr. Susi Pariasek, the official receiver dealing with the demise of Rock & More 1.

Its cash flow situation was such that others involved in the shows were said to be having behind-the-scenes talks to see if they could be taken over in order to keep Pariasek from trying to seize the box office.

Dieter Semmelmann of Semmel Concerts, part of Germany’s Medusa Group, met Österreich Ticket chief exec Andi Egger to work out if such a takeover would be possible. Both companies are co-owned by German ticketing giant CTS Eventim.

In May 2007, four months later and before any of the shows that Semmelmann and Egger discussed had taken place, Rock & More 2 was sold to the Austrian and Dutch investors. At the beginning of February it tanked for an estimated euro 2 million.

"I can’t get money from the second company for some of the losses from the first one if the second one’s also gone bankrupt," Pariasek told Pollstar, giving up on her efforts to prove that, in effect, R&M 1 and R&M 2 were basically the same outfit.

Wolfgang Klinger, who acted as a consultant for both Rock & More 1 and 2, and managing director Chris Dorrer left the company in January. After selling it to Lenox and Lavinia, Hanserl is said to have moved to Germany and returned to working in the laser optics business.

Rock & More’s last tour was a four-date Balkan run for Chris Rea that ended in Belgrade March 4, which agent Bob Gold – with Klinger’s help – kept alive by getting other local promoters to come in and take over the shows.

Egger handled the Vienna show, Hrvoje Hum of Nota did Belgrade and Zagreb, and Martin Stoyanov of Joker Media took over the Sofia date.

What appears to be Rock & More’s final curtain call might be scant consolation to Balkan promoters who claim to be owed several thousand euros – although Klinger has often said the reverse is true – or to the small local suppliers that have been hit from the fallout from one or both bankruptcies.

Andreas Strohmayer of Prorelans, a production company that worked on Rock & More’s Austrian and Balkan shows, says he had to stop or he’d end up paying for it for "the rest of my life."

He was hit for euro 220,000 when Rock & More 1 went down, which resulted in him filing his company for Chapter 11 protection.

He says he continued working for Rock & More 2 because it was promoting shows and he needed to earn enough to pay the creditors he had from the collapse of Rock & More 1. He claims he lost a further euro 50,000 when the second company went down.

He says he continued working for Rock & More 2 because it was promoting shows and he needed to earn enough to pay the creditors he had from the collapse of Rock & More 1. He claims he lost a further euro 50,000 when the second company went down.

The February 29 edition of top-selling Austrian daily Der Standard ran a breakdown of the nine companies or subsidiaries that have gone bankrupt during or shortly after Klinger’s involvement with them.

Apart from MT Veranstaltungs GmbH – the former Rock & More Veranstaltungs GmbH – and Rock & More Beteiligungs GmbH, the paper lists the downfall of the Austrian Promoters Group and its subsidiaries as well as the companies Klinger had with Egger before the latter joined Österreich Ticket.

Klinger told Pollstar he currently has two companies, his own KW Consulting and another called K&D Management, which is co-owned and headed by Dorrer.

He said it has the backing of New York-based Schuhmertl Markets, an IT solutions and advisory firm with an office in Vienna.

The company sees marketing synergies with the live entertainment industry and is looking to set up a promoting business in central and eastern Europe and Southeast Asia.

It’s also looking to work with CTS Eventim with the intention of staging concerts in Russia.