Brooklyn agency Madwell shuts down amid allegations of financial mismanagement
Independent creative shop ceases operations after 17-year run, leaving employees and vendors in limbo.
Four days after its sudden closure, the Brooklyn-based advertising agency Madwell remains the center of controversy in the marketing world. CEO Chris Sojka announced the immediate shutdown of the indie agency in an email sent to staff at 8:30 pm on April 30, bringing an abrupt end to the 17-year-old creative shop.
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In the message obtained by Adweek, Sojka stated: "Madwell will be ceasing operations at 11:59 pm tonight. A small team will work to unwind various aspects of the business over the next 2 weeks, tending to the obligations they are able to." The agency promised to pay the previous two pay cycles (April 15 and 30) from remaining receivables and cover health benefits until the end of May.
Allegations of fraud and financial mismanagement
The shutdown message contained serious allegations of fraud perpetrated by former executives. Sojka claimed that "between 2019 and 2023 alone, more than half of our revenue, per our own books, was hidden from myself and the government. In a practical sense this equates to over 130 million dollars."
Sojka further alleged that "the scale of these misdeeds, compounded by the press narrative blaming me for our financial instability (which in turn caused us to be terminated by our biggest client), have made any fundraising impossible."
One of the former partners referenced in Sojka's email, David Eisenman, responded to Adweek with a statement strongly refuting these claims: "Chris's accusations simply aren't true. At this point, they seem like a last-ditch attempt to shift blame for the damage he's caused. The court records, evidence, and reporting speak for themselves." The agency's former CFO did not respond to requests for comment before publication deadline.
A pattern of financial turmoil
Madwell's shutdown comes after months of escalating financial troubles and increasing scrutiny of Sojka's leadership. The agency had been struggling with inconsistent payroll, significant debt, and mounting legal issues.
Financial problems at Madwell began surfacing publicly in early 2025. According to court documents reviewed by Adweek in April, Bank of America was seeking to seize the agency's assets after Madwell defaulted on more than $4 million in loans. The bank had received one $400,000 principal payment in November 2023, but subsequent payments were missed, increasing the debt with added interest and fees.
By January 2025, despite initial payments, Madwell still owed over $4.1 million, primarily $3.64 million in principal, plus interest charges, late fees, and nearly $157,000 in attorney's fees. Court documents indicated interest continued accumulating at approximately $1,385 per day.
Extravagant spending amid cash flow problems
The financial distress faced by Madwell stands in stark contrast to Sojka's spending decisions. According to reporting by Adweek, Sojka purchased a $17.5 million private jet while the agency was struggling to meet payroll obligations. The acquisition required a $14 million loan, made during a period when employees were experiencing payment delays.
In an April interview with Adweek, Sojka defended the jet purchase as a strategic business move: "We needed to make new friends and new clients. So I wanted to get in the aerospace... that's why we bought the plane." He claimed the aircraft would appreciate in value to approximately $23 million.
Other controversial expenses included a reported $1 million launch party and $145,000 payment for an appearance by Wiz Khalifa for client work - decisions made while staff faced increasing uncertainties about their compensation.
Impact on employees and vendors
The sudden closure has left approximately 80 employees without jobs and numerous vendors with unpaid invoices. Before shutting down, Madwell had already furloughed an estimated 28% of its staff in mid-April, according to impacted employees who spoke to Adweek.
Many vendors are reportedly owed tens of thousands of dollars. One vendor told Adweek in early April: "I'm a vendor and these people owe me and others so much money, like 10s of thousands. Unreal."
In his final email to staff, Sojka expressed hope that "Bank of America (itself a fraud victim), in conjunction with our other large corporate creditors, will work with us so we can further prioritize paying down debts to the many small businesses and individuals most impacted by this theft."
Client departures accelerated decline
Client losses accelerated Madwell's downward spiral. In April, the agency lost its Verizon account, which Sojka described in an email to staff as costing the company "eight figures in annual revenue." This significant blow came as the agency struggled with its mounting debt obligations and inability to consistently make payroll.
Founded in 2010 in what was then still-industrial Brooklyn, Madwell had positioned itself as "a proudly indie, integrated creative company committed to not acting like an agency." The shop had worked with notable clients including Verizon, E.l.f. Cosmetics, and Visible, among others.
Legal disputes between founders
The shutdown follows a contentious legal battle between Sojka and co-founder Eisenman that was settled in October 2024. Though specifics of the settlement remain private, it resulted in Sojka gaining sole control of the agency.
Throughout 2025, Sojka repeatedly attributed Madwell's financial problems to actions taken by former executives. In various statements and interviews, he claimed that debt with Bank of America originated from decisions made by previous leadership in 2021, when they allegedly "raised our credit facility."
Industry impact and lessons
For the marketing community, Madwell's collapse serves as a cautionary tale about financial management, leadership accountability, and the fragility of independent agencies in today's competitive landscape.
The agency's downfall highlights the importance of transparent financial practices and the risks of pursuing growth without adequate financial controls. It also underscores the potential consequences when leadership priorities misalign with operational necessities.
"Independent agencies operate on tight margins and need disciplined financial management," said marketing consultant Janet Rivera, who specializes in agency operations. "When cash flow problems emerge, transparency with staff and clients becomes crucial. Once trust erodes, it's extremely difficult to recover."
The industry may see increased scrutiny of agency financial practices and greater emphasis on operational transparency as a result of this high-profile closure.
Luís Rijo
Timeline
- 2010: Madwell founded in Brooklyn by Chris Sojka and David Eisenman
- 2023: Legal disputes emerge between Sojka and Eisenman
- October 2024: Sojka and Eisenman settle lawsuit, with Sojka gaining control
- November 2023: Madwell makes $400,000 payment to Bank of America but misses subsequent payments
- January 2025: Bank of America documents show Madwell still owing over $4.1 million
- March 2025: Reports emerge of Sojka's $17.5 million private jet purchase amid financial troubles
- April 7, 2025: Bank of America seeks to seize Madwell's assets after loan defaults
- April 16, 2025: Madwell furloughs approximately 28% of staff
- April 16, 2025: Reports surface that Madwell lost Verizon account, a significant revenue source
- April 23, 2025: The New York Times sues Madwell for $37,000 in unpaid advertising bills
- April 30, 2025: Sojka announces immediate shutdown of Madwell in email to staff
- May 4, 2025: Industry continues to process the sudden closure and its implications