Backers of a project to reboot the classic ZX Spectrum as a handheld games console have been left half a million pounds out of pocket after the developer went to the wall.
As we have previously reported, the project to bring back the cult 80s device launched by Retro Computers Ltd has been dogged with problems in what has become a long-running saga.
The company initially set up a crowdfunding campaign through IndieGoGo to bring the concept to life. It raised £513,000 from more than 4,500 backers, with Retro promising each enthusiast a finished console when production was completed.
However, the completed ZX Spectrum VEGA+ devices never materialised, with persistent stories of conflict between directors, poor financial management and technical issues.
Retro Computers Ltd has now been wound up, with a number of court cases pending between different factions of directors.
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The encouraging news for backers who put money into the project through IndieGoGo is that it seems they will be considered as unsecured creditors when Retro goes through the liquidation process, giving them a glimmer of hope for recovering at least some of their investment.
This would not normally be the case for people who put money into a crowdfunding scheme. Companies like IndieGoGo act as agents, with backers entering into agreements with the third-party funding site, not with whoever is looking to raise the cash. However, crowdfunding sites also have clauses in their terms and conditions absolving them of liability if a project does not deliver on its promises.
But last year, one of the IndieGoGo backers went to court arguing that Retro’s promise to deliver a console amounted to a contractual agreement and that he should be entitled to his money back in the event of non-delivery. The claimant, Rob Morton of Mickleover, Derby, England, won the case, which has apparently paved the way for all backers to be considered creditors following Retro’s demise.
It is, however, extremely doubtful that backers will ever see any of their money, regardless of that legal precedent. Nobody can be sure of the value of the assets that are left in the company, but in our experience, it would be rare for upwards of half a million pounds in funds to be left in a liquidated company for unsecured creditors once assets have been dispensed to other creditors.
Backers would be advised to register their claim with the liquidator, just in case. But they should be aware that, in the pecking order for debt repayments, they fall behind secured creditors like banks and preferential creditors like employees. When they have all received a share of any available funds, there is very likely to be nothing left in the cupboard for anyone else.