TUGG Bankruptcy Update with Former CEO Pablo Gonzalez

He everyone. I was able to get the former CEO of the on-demand theatrical booking company TUGG, Inc. on the phone yesterday. If you are unaware TUGG has closed its doors and unfortunately, this has affect many filmmakers in the process. On Jan 29, 2020, I broke the TUGG story, you can listen to that podcast here: IFH 373: Is TUGG Going Bankrupt and Not Refunding Filmmakers & Customers?

At the time there was very little information and all we had was rumors. After speaking to Pablo I now have a better understanding of not just what happened but also how filmmakers will be affected moving forward. Below you can read the message that was sent out to all the TUGG filmmakers.

Below is the letter that Pablo sent out to all the filmmakers on the next day.

Letter from Pablo Gonzalez, CEO, Co-founder Tugg

Dear filmmakers and colleagues,

This is a follow up to the too brief of a message sent yesterday which was an urgent attempt to provide information about the facts of what is happening at Tugg.

Over the past two years, Tugg had been working to be acquired by an entity that was a strategic partner, who would help us to not just survive as a company, but that would also allow us to get caught up on all outstanding payables, and to continue to improve the quality of our service.

We were blindsided to learn the deal died at the finish line this past Friday 1/24/20. Given that for the first time in that period, we knew we couldn’t meet our obligations to our team, and our partners, we had to begin steps to close our doors.

We started this company 9 years ago with a vision to help filmmakers and distributors reach their audiences without having to sacrifice on the quality of the experience their film deserved or the breadth of reach that their film was capable of having.

It is heartbreaking to not be able to continue in that endeavor. It took blood, sweat, and tears to get it off the ground and to keep it going until the very last moment. We know that we’ve let you down. Every former Tugg employee, director, and board member takes this weight very personally. We don’t think of these events simply as an unfortunate business circumstance. We know there are people affected behind every film, theater, or institution we worked with. And we’re doing everything we can even as we’re closing down, to settle each situation, within the realm of possibility, with each individual and entity we’ve worked with.

I know many of you have questions regarding the status of the rights for your films, money owed, refunds to customers and inventory that is currently held by Tugg. I’ll try to answer some of these questions here.

– Effective immediately, since Tugg can no longer meet its obligations, the rights to your film are released and you are able to find a new distributor.

– I will be doing my best to provide a mechanism for all that hold product inventory at Tugg, to be able to have it shipped to them. Sadly, since our financial resources are frozen, it will have to be at your expense.

– I am working to provide sales reports, and contacts for orders that haven’t been fulfilled.

– All tickets for canceled events are being refunded within 48-72 hrs.

– Tugg is in the process of selling assets of value, and as time progresses over the coming weeks and months every penny that is obtained will be destined to pay back creditors, proportionately to the amount owed. I am also working with a couple of groups that may be able to offer additional recovery of unpaid fees in exchange to be able to carry your film moving fwd.

There are no team members left at Tugg to help in settling the several open issues of the business. No one is earning a salary and it is just me doing my best to communicate and take care of as many tasks as possible that will hopefully set each of you on a new path with your films.

Some of you know me, and you know the character of the team. Over the past couple of days, I’ve mainly focused on ensuring each team member has their basic needs covered in this transitional phase of their career/life. They are family to me. They cared deeply about each of you. I couldn’t imagine a better group of people to work within these past years as their loyalty and work ethic is not something that translates through in a resume.

I couldn’t have expected to find such amazing people. I ask that you please be kind to them, as none of this is their fault and they’ve fought hard always to serve you as best they could.

I will do my best over the coming weeks to send updates on the status of the company, and I apologize in advance for all the messages I can’t respond to individually.

Best,

Pablo Gonzalez CEO, Co-founder
Tugg


After speaking to Pablo yesterday I got a clearer picture of what he is doing behind the scenes to make things right with filmmakers. At this time there are NO EMPLOYEES working for TUGG. Pablo is working without pay to try to generate revenue to pay filmmakers what they are owed.

Paying Back Filmmakers Money Owed

According to Pablo, he is selling any and all assets the company owns to pay filmmakers the money that they are owed. From couches and computers to coffeemakers and desks. He is currently in negotiations with companies who are interested in the IP or Intellectual Property the company owns. The technology, the platform, the back-end, and so on. If and when he can lock down those deals all the money will go to paying back filmmakers.

Why did the cancel sold-out screenings?

The reason TUGG canceled all the events that were on the books, many of which were sold out, is that once the company closed there were no resources or support teams to pull off the events. They had no insurance and it would’ve been impossible to move forward. Pablo assured me that all the customers who paid for events and screenings that were canceled where or will be refunded in full.

Moving Forward

After speaking to Pablo I got the feeling he is trying to do the right thing. Of course, actions speak louder than words so only time will tell. I have heard from some TUGG filmmakers that have been getting paid the money they are owed so I believe he’s moving in the right direction. Unlike the Distribber management team, Pablo is not hiding in a cave somewhere, he is attempting to do what he can to rectify the mistakes that were made. Pablo told me he would reach out to Indie Film Hustle when he has more updated information on how things are going.

Pablo is currently the only former employee fielding all the emails and questions so it will take time for responses. He told me to pass along his sincerest apologies for what has happened. He began TUGG to help filmmakers and for almost a decade did just that. Unfortunately, the business didn’t support the vision and he is doing everything in his power to repay any and all filmmakers the were affected by TUGG closing it’s doors.

As soon as more information is available I’ll update the tribe and all other filmmakers affected by this situation. Keep on hustling everyone.

For the latest and most updated info on the TUGG bankruptcy join the Facebook Group: Protect Yourself from Predatory Film Distributors/Aggregators.


Letter sent to TUGG Employees

The film distributor Tugg has closed down according to an email sent to filmmaking partners by a former employee of the company, Alex Dobrenko. Dobrenko’s email included a link to an open letter from himself and a colleague named Brian P. summarising the issues, as well as a statement by Tugg’s CEO, Pablo Gonzalez. Dobrenko and his colleague wrote.
“Tugg is over. This past Friday employees at Tugg were notified we had lost our jobs, and effective immediately Tugg would be shutting down.”
Dobrenko goes on to say
“We were blindsided by this. We ask for no pity, but we are personally struggling with coming to terms of both the loss of a job and the end of 9 years of hard work.”
After nine years in operation, it was obviously a shock to Tugg’s employees that the company was closing its doors without notice. CEO Pablo Gonzalez explained how this came about in his letter:

Over the past two years, Tugg had been working to be acquired by an entity that was a strategic partner, who would help us to not just survive as a company, but that would also allow us to get caught up on all outstanding payables, and to continue to improve the quality of our service.

We were blindsided to learn the deal died at the finish line this past Friday 1/24/20. Given that for the first time in that period, we knew we couldn’t meet our obligations to our team, and our partners, we had to begin steps to close our doors.”

It is a worrying picture of the independent film distribution landscape that without being acquired by a “strategic partner” Tugg lapsed into insolvency seemingly overnight.

Gonzalez went on to summarise the position of Tugg’s filmmaking partners:

Effective immediately, since Tugg can no longer meet its obligations, the rights to your film are released and you are able to find a new distributor.

I will be doing my best to provide a mechanism for all that hold product inventory at Tugg, to be able to have it shipped to them. Sadly, since our financial resources are frozen, it will have to be at your expense.

I am working to provide sales reports, and contacts for orders that haven’t been fulfilled.

All tickets for canceled events are being refunded within 48-72 hrs.

Tugg is in the process of selling assets of value, and as time progresses over the coming weeks and months every penny that is obtained will be destined to pay back creditors, proportionately to the amount owed. I am also working with a couple of groups that may be able to offer additional recovery of unpaid fees in exchange to be able to carry your film moving fwd.”

Gonzalez went on to add:

“There are no team members left at Tugg to help in settling the several open issues of the business. No one is earning a salary and it is just me doing my best to communicate and take care of as many tasks as possible that will hopefully set each of you on a new path with your films.”

In a heartfelt conclusion to their open letter, Dobrenko and Brian P. shared their feelings on what the failure of Tugg means for them and for the many filmmakers who dealt with the distributor:

“We’re so grateful for the last nine years – Tugg has taught us what it means to create a business from an idea, to develop and grow relationships with partners and most of all, it’s taught us how amazing and kind and creative and resilient people of the independent film industry are. We’ve built real bonds with so many of you, bonds we hope can continue beyond this rather sour last chapter. We’re truly sorry for the pain and anguish you’re going through.”

Tugg was a well-regarded distributor and provided much-needed grassroots impact and outreach to filmmakers around the world. Whether it was mismanagement or a simple failure of the business model itself is still unknown, but it is hoped that distributing independent films can and will remain viable for those brave enough to try. RIP Tugg.

Thank you to IFH Tribe Member Mike Freedman for sharing this information.

You can read the FULL letter yourself here. 



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