The organizers of Pemberton Music Festival are being accused of fraud after filing for bankruptcy and announcing that automatic ticket refunds for the canceled July 13-16 event would not be issued.
WME Head Of Music Marc Geiger has promised to help make a case against the fest’s owners, telling Pollstar, “This is criminal what they did. … They stole people’s money … then hid in bankruptcy.”
The 2017 event in Pemberton Valley, British Columbia, would have marked the fifth edition of Pemberton Music Festival, after debuting in 2008 then returning under different ownership in 2014.
While the infamous Fyre Festival was a disaster waiting to happen, Pemberton’s bankruptcy and cancellation are shocking because of the involvement of established players. Promoters Huka Entertainment became well-known and, by all accounts, respected in the industry by the flourishing of the Hangout Music Festival in Gulf Shores, Ala, founded by Huka’s A.J. Niland and Shaul Zislin. Although Huka is no longer involved with the festival, it was the foundation upon which Huka created a thriving promotion business.
Also, Ticketfly handled Pemberton’s ticket inventory.
Huka produced and promoted the festival in collaboration with the Village of Pemberton and partners the Sunstone Group, the Lil’awt Nation and Squamish-Lillooet Regional District.
The 2017 lineup was supposed to feature a number of WME clients including Alesso, Big Sean, Tegan and Sara, Slightly Stoopid, Ben Harper & The Innocent Criminals, and Eagles Of Death Metal.
The splash page on the festival’s website was replaced May 18 with a notice about the bankruptcy of Pemberton Music Festival Limited Partnership and 1115666 B.C. LTD (collectively PMF) which says Pemberton Music Festival will not be issuing automatic refunds for tickets “as PMF is now in bankruptcy, it has no ability to provide refunds.” The website notes that ticketholders can “file a proof of claim form as an unsecured creditor with EYI [bankruptcy trustee Ernst & Young Inc.] in accordance with the claims process.” Ticketholders are advised to contact their bank or credit card issuer to see if refunds are available from third parties for tickets purchased using a credit card.
Ticketfly reportedly released ticket sales to PMF ahead of the bankruptcy filing.
“[Pemberton Music Festival] obviously put their company they’re hiding behind bankruptcy … but they did something else reprehensible – they actually took the ticket money from Ticketfly, which Ticketfly never should have given them,” Geiger said. “[PMF] kept it knowingly and then went into bankruptcy and screwed the consumers. And to me, the ticket company is supposed to do the refunding.”
Vancouver Sun reported that PMF “may owe ticketholders and other creditors more than $16.7 million,” with $6.6 million in assets and a deficiency of $10.1 million. There are 120 unsecured creditors involved, including two dozen U.S.-based claimants, such as a charter-bus firm owed $577,547, and numerous small local firms owed less than $10,000.
One big red flag in this fiasco is that Amanda J. Girling is listed as a former director of 1115666, which was acting on behalf of Pemberton Music Festival Ltd., and is the current director of secured creditor Janspec Holdings Limited. The Sun reported that secured creditors 1644609 Alberta Ltd. and Janspec Holdings Limited will reportedly be paid in full before unsecured creditors (not to mention ticketholders).
In other words, it appears that festival organizers are trying to pay themselves first.
The festival has reportedly collected $8.2 million in ticket revenue this year – in contrast to the budgeted expenses of $22 million, according to a fact sheet posted by the bankruptcy trustee.
Festival directors are reportedly blaming the money problems on decreased ticket sales, increased operating losses, a weakening Canadian dollar and “difficulty in sourcing talent … due to a limited number of artists touring in 2017.”
Geiger warns that the damage to consumer confidence from both Pemberton and Fyre could have repercussions across the concert business, equating it to “the housing bubble.” He said that moving forward, WME and other agencies are most likely going to tighten up financial requirements and deposit requirements.
“Vendors will do the same – they’ll want deposits. So overall what really ends up happening is when events like this happen and the financing tightens up, really only AEG, Live Nation and other big, big companies are trusted. That hurts the marketplace because it starts to box out independents. A healthy Live Nation and AEG are necessary but independents are necessary too. That’s what comprises the ecosystem. A lot of innovation comes from independents. So it hurts consumers, it hurts the industry, it hurts everyone. It’s a problem.”
Geiger added, “I think you’re going to see potentially [ticket] sales of other festivals slow. So I think it’s a very, very, very bad thing. … We can’t have this in the market place. It can’t exist. It has to be stamped out immediately and dealt with swiftly. ”
And that is why, whereas agencies normally do not speak publically about such situations, WME is “going for it.”
High Road Touring’s Frank Riley – who also works with a number of artists who were supposed to play Pemberton – is historically reticent to speak on the record but called in to Pollstar to echo Geiger’s comments.
“It really does destabilize the independent festival promoter,” Riley said. “These two events [Pemberton and Fyre] make everybody more wary and it may result in further consolidation of the live music touring business, which would be a shame and, on a lot of levels, a disaster. Keeping the independent promoters alive and viable and productive is a way of keeping music alive and viable and productive. The corporate world is a little bit less about music and a little bit more about money and that’s what’s really upsetting here.”
He added, “To take money away from innocent and unwitting consumers to line their own pockets and to hide underneath some bogus corporation is reprehensible. … I’d like to hear what their reasons are and I’d like them to be punished in the way they should be.”
Riley brought up the first edition of BottleRock Napa Valley and how some of his friends who worked the festival didn’t get paid.
“The artists did eventually [get paid] because there was a collective response. This one is different. The artists aren’t being paid. We’re all getting screwed. It’s terrible. There’s an additional layer here where people have [to be able to] trust that the money they put down actually buys them admission to something that’s real. And that’s what’s in question here. How real was this? How real were those offers? Why was this [bankruptcy] announced on the day that it was? I think it was when all the deposits were due. I know it was the day that our deposits were due. …
“The whole world seems to think if they can get some protections legally then they don’t have any moral responsibilities. … Overall, it’s a moral issue. It’s taking advantage of people who have no recourse, who can’t defend themselves. … I just hope it gets resolved in a good way and I want the public to be taken care of and I’d like our artists to be taken care of.”
Huka Entertainment released the following statement May 18 in response to the news of the cancellation: “For the past four years Huka Entertainment has worked to create a one-of-a-kind experience in the most beautiful place on earth. We are heartbroken to see the 2017 Pemberton Music Festival canceled.
“As a contract producer, Huka did not make the decision to cancel the Festival. That decision was made by the Pemberton Music Festival, LP. We are extremely disappointed for our fans, artists and all of our partners who have supported the festival over the years.”
Vancouver Sun reported that Twisted Tree Circus GP – whose directors were listed as Huka CEO Evan Harrison and Huka Chairman and chief experience officer A.J. Niland – controlled Pemberton Music Festival until April 19, when they were replaced as general partner by 1115666.
The directors of 1115666 – Girling, James A. Dales and Stephane Lescure – filed a notice of change of directors with the B.C. Registry Services May 17, the day the decision was made to cancel the festival, according to the Sun. Bankruptcy was announced the next day.
Although Huka is saying it was not involved in the cancellation, the Sun reports that “Girling and James Dales – former directors of 1115666 – said the board’s third director, Stephane Lescure, of California, acted as a representative for Huka, participating in board discussions and approving and signing a resolution to assign PMFLP and 1115666 into bankruptcy.”
Lescure sent a statement to Pollstar disputing the claims of Girling and Dales, as reported by the Sun, that his vote represented Huka. Lescure said via email, “Just to confirm regarding my vote on PMF, I confirm that ‘I voted for myself.’”
Huka has declined further comment; phone numbers associated with Girling and Dales were not in service when called. Ticketfly released a statement May 19 via Facebook that noted the bankruptcy trustee had informed Ticketfly that “a stay was put in place freezing all funds for this event. Ernst & Young will provide a proof of claims form for ticket refund requests in the near future at their website http://www.ey.com/ca/pmf. We will continue to provide updates on this situation as more details are made available.”
Representatives for Ticketfly were said to be traveling this week and were not available for comment.
“I certainly hold Huka responsible for their own behavior,” Riley said,” but there’s a difference between responsibility and blame. That goes to the people of Pemberton [Music Festival]. But I’m no lawyer. Huka may or may not be complicit. They claim they’re not; I’m an optimistic person and I generally believe what people tell me.”
Geiger, however said: “They’re out of business. We’re going to kill them. Done and out. They’re never, ever, ever, ever going to be able to do business with us.”
Update: A source confirmed to Pollstar May 26 that Huka Entertainment has laid off some members of its staff following Pemberton’s cancellation.