Napa’s Uptown Must Repay $500K

The money was part of an attempt by BR Festivals to purchase the venue. The money will be repaid to BR Festivals’ bankruptcy estate in order to be distributed to the festival’s creditors, according to the Napa Valley Register.

BR Festivals principals Bob Vogt and Gabe Meyers put the $500,000 down in 2013 as a non-refundable deposit on a $4.5 million down payment in an attempt to buy the Uptown Theatre, according to the Register.

A creditors suit alleges the $500,000 came from advance BottleRock 2013 ticket sales. A deal was reportedly negotiated by Vogt and Meyers on behalf of BR Festivals to purchase the Uptown for $12 million in March, 2013, just two months before BottleRock’s inaugural weekend, according to court filings reported by the paper.

Chief Bankruptcy Judge Alan Jaroslovsky wrote that the deposit payment was “clearly fraudulent” to BR Festival investors, who are still owed millions of dollars, and should be repaid. Vogt was a partner in BR Festivals until he resigned in late 2013. He was also, through a trust, a 10 percent owner of the Uptown Theatre, according to the Register.

“Vogt was an insider of both the buyer and the seller,” Jaroslovsky is quoted. The remainder of the $4.5 million down payment on the Uptown never materialized, and the deposit was lost. Attorneys for the Uptown argue it was entitled to keep the non-refundable $500,000. Despite a “fair amount of cash” from BottleRock ticket presales, BR Festivals was “nonetheless insolvent by any measure,” Jaroslovsky wrote.

“Its debts far exceeded its assets,” and BR Festivals did not have sufficient remaining assets to pay its concert creditors “and its managers knew it.”

The judge added he was “not convinced that Vogt did not enter into the agreement for the sole purpose of preserving some of (BR Festivals’) cash for himself notwithstanding the inevitable failure” of BR Festivals, according to the Register.

The judge also faulted Uptown Theatre owner George Altamura for the making the deal, as he “must have at least suspected that (BR Festivals) was going to fail financially.” Court documents in the bankruptcy provide something of a tally of BR Festivals’ financial wreckage.

Festival expenses topped $20 million, with gross income of only $11.2 million. BR Festival paid more than $7 million for 60 bands over five days, including headliners The Black Keys, Kings of Leon, and Uptown Theatre.

Other lawsuits are still pending, and a food and beverage contract was reportedly settled in September for $215,000. The attorney for BR Festivals’ bankruptcy estate is also said to be looking to recover $3 million that was “fraudulently transferred” to another investor named Jason Johnson.

Trial in that case is set for February. BottleRock has successfully continued under new producers Latitude 38, which acquired the BottleRock name and partial assets in January, after BR Festivals collapsed under the weight of debt and lawsuits. Latitude 38 successfully pulled off a scaled-back “BottleRock 2.0” May 30 and June 1, and tickets are on sale for BottleRock 2015.