Hip hop label Dawn Raid, for so long a shining example of local music success only to have very public fall from grace last month when it went into voluntary liquidation owing a reported $1 million to creditors, has arisen from the ashes.

The original Dawn Raid remains in liquidation but founders Brotha D and Andy Murnane have bought back the rights to the back catalogue and music publishing, with the help of two new high-profile investors, and set up a new limited liability company, Dawn Raid Music Limited, says Murnane.

The new backers are John Barnett, of South Pacific Pictures fame (who recently also invested in the Satellite Media group, buying founder David Rose out) and businessman and Vector chairman Michael Stiassny, described in the NZHerald last year as "the fix-it man" for his record as a liquidator brought in to rescue collapsing companies.

Operating from same offices as the old label, the new-look Dawn Raid Music will continue to have major label distribution through Universal Music in New Zealand, despite Universal being one of the larger creditors still owed money.

The label's roster may be in for a change, however, as no artist contracts have been carried over from the previous company.

"We're hoping to resign many of them, which we're in the process of doing now," says Murnane. "It gives everyone the opportunity to go elsewhere, which some will no doubt do, or continue to work with us."

He says the last 16 months have been hell.

"Danny and I sold our houses. We'd been trying to do everything we could to get the company out of that hole... it's not like we've been hiding under the bed hopeing everything would go away. It's been a horrible 16 months for us."

"The reality is we were in a really tough situation, one that we just couldn't get out of, so we had to make a tough decision to go into liquidation."

He says Dawn Raid's problems, largely in the form of unpaid taxes (IRD is $410,000), were compounded by the general decline in music sales worldwide, particularly in hip hop album sales, illegal downloading and their rush to expand into Australia faster than could be sustained.

Despite that, he's confident the new company will thrive, and that he and Brotha D (employees of the new company) have learned the hard lessons required to make a success of Dawn Raid version two.

"Other business people we've talked to have described this as characther-building, which I guess is right. We've learned a lot. We have to accept what happened and move on, and we have to deliver.

"In a way, we're starting from scratch again. When we started out 10 years ago they were saying hip hop was in a slump and there wasn't an audince for New Zealand music. But I think we showed what we good at, creating hit songs with some very talented artists, and that's what we need to focus on again."