Its Official Almost!

The joint administrators proposals report to creditors on Reachlocal UK was published recently. The creditors are actually in the main Reachlocal Inc (they left a huge debt in the company which was rather clever as essentially this means that the administrators are working on behalf of Reachlocal!)

We would have written about it sooner but have lawsuits from Germany and the US to deal with (Sharon Rowlands and her lawyers are trying to stop us from exposing them to their remaining markets by burying us in legal paperwork)

It is hardly surprising really as the closure of Reachlocal UK has cost Reachlocal $25.2m run rate business. Although officially Sharon and Reachlocal inc are not linked to Reachlocal UK!

One of the real reasons Reachlocal UK went into administration was, wait for it……..

“Alleged Mis-selling To UK Companies”

Section 3.3 “The declining revenues were the result of both increased competition in the sector and reputational damage caused by a number of alleged mis-selling claims brought by former customers.”

Section 3.4 goes on to say “Whilst the Company took steps to resolve these claims, management also decided to explore the possibility of a sale and subsequently received an expression of interest from the Competitor to purchase the Company’s business and assets.”

In other words they spoke to these former customers, realised that they would not be able to survive what was a blatant act of mis-selling on a huge scale so decided to bail out.

Still Profiting From UK Businesses

Reachlocal did manage to do a deal with Fat media though before they bailed out. They managed to get a deal in place with Fat media whereby they get a kickback from Fat Media for using the platform. Even worse it appears that Fat Media are not showing the hidden spends meaning they can charge clients whatever they like!

All in all a ‘win win’ for the well paid Sharon Rowlands and Reachlocal, not only do they manage to get out of the UK without paying these SMB’s back or face court action, they also manage to do a deal with Fat Media.

We will eventually be handing over all documentation to the Serious Fraud Office based in London and will keep everybody up to date on progress.