Media Corp has announced that following a financial review by the company’s new management team, the Purple Lounge division will be put into liquidation.
It has become clear during the review that the financial and trading position of the Purple Lounge division is no longer tenable due to historic operational and financial failings within the business. Accordingly, the board has made all of the staff within that division redundant and will be instructing lawyers to file the relevant documentation to put the relevant companies into liquidation.
The board will specifically request that the appointed liquidators look into the financial arrangements within the Purple Lounge group of companies and to review the position as to player funds.
The board is exploring routes to try to mitigate the expected player losses, though this is against a background where the group has loaned well over £1m to the division since its acquisition in October 2009. It does not believe that the group will incur any further liabilities in respect of Purple Lounge over and above the realisation of the above loan.
A statement from Media Corp this week said that the board believes it can put the poor trading of Purple Lounge behind it and will be working to bring the group back to profitability as quickly as possible.
