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Ticketfly Given Go-Ahead To Pursue Pemberton Chargeback Funds
Andrew Chin/Getty Images – Pemberton Music Festival 2016
A general view of atmosphere during day 1 of Pemberton Music Festival on July 14, 2016 in Pemberton, Canada.
As the bankruptcy proceedings for the defunct Pemberton Music Festival continue to wind its way through court, a judge has ruled Ticketfly has permission to file a claim to recover the “chargeback” funds the company was hit with after fans obtained refunds for canceled tickets from their credit card companies.
Festival organizers announced in May 2017 that the annual event in Pemberton, British Columbia, was canceled and automatic tickets refunds would not be issued because the festival was filing for bankruptcy. With just three months to go before the 2017 festival was to take place, the news shocked many in the concert industry, notably because of the involvement of established players like promoter Huka Entertainment and Ticketfly.
Ticketholders were advised to file a proof of claim form as an unsecured creditor with bankruptcy trustee Ernst & Young or contact their bank or credit card issuer to request refunds. A source confirmed to Pollstar in January that approximately 80 percent of ticketholders received refunds via their credit card companies, as first reported by Amplify. When these fans got their money back, the credit card companies collected chargebacks from Ticketfly.
The judgment by Madam Justice Iyer in the Supreme Court of British Columbia Aug. 3 involved reviewing the bankruptcy trustee’s disallowance decision about Ticketfly’s claim for chargebacks. The ticketing company had initially filed a claim for $7.9 million in chargebacks in June 2017, the trustee disallowed the claim in November 2017, the claim was amended and an amended disallowance was issued in January.
Iyer concluded “that the Trustee’s disallowance of the subrogated claims was a palpable and overriding error and cannot stand.” The error involved interpreting language in the service agreement between Huka and Ticketfly in regards to ticketing for Pemberton.
As first reported by Canadian publications such as The Province, Iver wrote in the judgement that, “Disallowance of Ticketfly’s subrogated claim on the basis that it is not Huka’s agent is also inconsistent with the Trustee’s acceptance that Ticketfly is subrogated to the ticketholders’ claims. If Ticketfly had no authority to act as agent for Huka, then there would be no subrogated claim because Ticketfly would not have been liable to Huka (or as it were, PMFLP) for the chargebacks.”
Ticketfly has until Aug. 31 to submit its claim for the chargebacks to the trustee via Excel spreadsheet including the names of the ticketholders, the total purchase price paid for the tickets, the amount of the chargeback and other details.
As part of Eventbrite’s $200 million agreement with Pandora to acquire Ticketfly, which closed in September 2017, Pandora agreed to assume all liability regarding ticket refunds, including the chargebacks.
The 2017 festival would have marked the fifth edition of Pemberton Music Festival, after debuting in 2008 then returning under different ownership in 2014 with Huka as the producer. The lineup was to feature Chance The Rapper, Muse, A Tribe Called Quest, Major Lazer, Haim, and Run The Jewels.
As previously reported, Pemberton incurred losses of approximately $47.7 million CAD: $16.9 million in 2014, $16.8 million in 2015, and $14 million in 2016.
Following the festival’s bankruptcy and cancellation, Huka laid off some members of its staff and CEO Evan Harrison exited the company in June 2017. Pollstar reported in October that the company may not be promoting concerts for the near future. Huka Entertainment was ranked No. 41 on Pollstar’s 2016 Year End Worldwide Ticket Sales chart for the Top 100 Promoters, with 423,024 in sales.