Design Pics Becomes Interim Manager Of Masterfile

Posted on 4/7/2020 by Jim Pickerell | Printable Version | Comments (0)

Design Pics Inc., based in Edmonton, Alberta, Canada has assumed the interim management of Masterfile during the bankruptcy process.

Masterfile first filed to restructure its business in April 2017 and was unable to make any royalty payments to photographers after January 2018. According to information supplied to creditors by Harris & Partners, the insolvency trustee, as of March 3, 2020 Masterfile had total assets of $270,000 and total liabilities of $4,092,654.41. They owe royalty payments for the images they licensed to 530 stock agencies and independent photo creators.

The following is a list, in the order of amounts owed, of the 60 creditors who are owed a combined total of $2,578,719.62.

Blend Images, Seattle $307,103.00   Gudmund Aarseth $24,764.68
Image Source $227,896.61   Michael Mahovlich $24,372.61
Newco 500 Ltd. $127,834.44   Frank Krahmer $23,980.02
Hero Images $116,587.06   Roy Ooms $23,663.31
Westend61 $102,465.11   Picscout Israel $23,464.82
Getty Imaqges $86,037.21   Pixelchrome Inc. $23,412.21
Tetra Images $74,780.44   Rubberball Productions $23,041.07
Fry Design $73,773.16   John Warburton Lee $22,552.78
Ernst & Young $65,472.07   Color By Benson $22,377.86
Blend Images, New York $51,274.00   Mark Tomalty $21,482.01
Minden Pictures $50,493.76   J.A. Kraulis $21,396.21
Maskot Bildbrya $45,549.97   New Paradigm $21,175.64
Stockfood $44,578.16   Fstop $20,833.83
Robert Harding Pictures $44,173.18   Aurora Photos $20,789.99
H. Armstrong Roberts $43,687.35   Tungro Images $20,334.36
Tineye $41,572.13   Jose Luis Stephens $20,324.23
PhotoAlto $40,169.72   Somos LLC $20,208.13
Juice Images $40,159.24   B-Zen Aflo $19,847.50
Raimund Linke $37,932.25   David Muir $19,840.63
Science Photo Library $36,738.81   824387 Alberta Ltd. $19,473.26
R. Ian Lloyd $35,775.85   I Dream Stock $18,858.71
Gary Black $34,955.33   Halasz + Burow $18,740.08
Design Pics $34,420.77   Cirque Dynamics $17,260.89
Jurek Photo $33,980.97   Jochen Schlenker $17,206.29
Martin Ruegner $31,428.09   Elba Worldwide Ltd $16,945.01
RGB Ventures dba Superstock $31,334.20   Mango Productions $16,581.45
Uwe Umstatter $30,882.33   Boden/Ledingham $16,544.70
Ty Milford $28,352.81   Photononstop $15,670.05
Osler Hoskin & Harcourt $27,855.04   Mint Images $15,520.14
Frank Lukasseck $25,525.76   Dodge Photo $15,268.33
Total owed Top 30 $1,972,788.82   Total owed next 30 $605,930.8
Total owed Top 60 $2,578,719.62      

What Happened.

Around 2010 when many stock agencies began discounting their prices to compete with Microstock, Masterfile adopted a strategy of “holding the line” on pricing and insisting on reasonable fees for the premium images they were offering their clients.

That strategy worked to a degree, for a while. Over the first few years they made a significant number of sales, but no where near enough to cover the overhead costs of rent, utilities, marketing and staff. They dramatically cut staff, but the income was still not enough to cover fixed operating costs and pay royalties. So they started delaying some royalty payments in hopes that things would turn around.

Meanwhile, virtually every other stock image supplier continued to cut prices dramatically to the point that usage fees now average about 10% of what they were a decade ago. More and more of Masterfile’s customers found that they could get everything they needed for much lower prices somewhere else.

Creditors have been told that Masterfile Corporation filed a voluntary assignment in Bankruptcy, under the Bankruptcy and Insolvency Act of Canada, on April 3, 2020. The bankruptcy trustee has supplied the 530 creditors with the the amounts each is owed in order that they might file a “proof of claim” in an effort to collect some of the monies. However, it is assumed that upon liquidation of the assets, and all professional fees and government remittances are accounted for, there will be no funds available to distribute to creditors related to debts incurred prior to April 3, 2020.

Design Pics Role

Design Pics points out that in addition to interim management of Masterfile, it has also made an offer to the Trustee to acquire the assets and continue the business of Masterfile on an ongoing basis, at the end of the bankruptcy process.

In the interim period during the bankruptcy process, and thereafter as well (if the Trustee assigns the assets to Design Pics Inc. under its offer), Design Pics Inc. will resume making regular royalty payments to the contributors and industry partners of MasterfileThese royalties will be applicable to any NEW SALES only, made after the bankruptcy of Masterfile Corporation. For absolute clarity, Design Pics Inc. is assuming no liabilities of Masterfile Corporation that were incurred prior to the date of bankruptcy, and any communications regarding these liabilities, should be directed to the Trustee. Masterfile will continue in the regular course of business under Design Pics management, providing full support and service to its clients.

Copyright © 2020 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


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