ODD TIME SIGNATURES
Fest failure spurs questions
Court documents and company registries shed new light on a U.S. production company’s involvement in the Pemberton Music Festival’s demise.
Huka Entertainment, based in New Orleans, has been lauded for producing massive music festivals in unique locations with a boutique feel. But last Thursday its reputation came under fire when Pemberton Music Festival LP and 1115666 B.C. Ltd. filed for bankruptcy and the popular July event was cancelled.
Up until a month before the cancellation, Twisted Tree Circus GP, incorporated in November 2013, controlled Pemberton Music Festival LP.
Twisted Tree Circus’ two directors were Evan Harrison and Abel Joseph (A.J) Niland, according to B.C. Registry Services documents. They are also the CEO and chief experience officer of Huka. Both weren’t available for comment Tuesday.
On April 19, Twisted Tree Circus was replaced as general partner of PMFLP by 1115666. Within a month, 1115666 and PMFLP had both filed for bankruptcy and ticket holders were told May 18 that there would be no automatic refunds for the cancelled event.
Ever since Twisted Tree Circus and Huka resurrected the festival in 2014 after its initial run in 2008, it’s been a money loser.
In statements posted to the website of the trustee in bankruptcy, Ernst & Young, decreased ticket sales and increased operating losses were blamed for the bankruptcy. The weak Canadian dollar and difficulty sourcing touring artists are also mentioned.
Huka has downplayed its role in last week’s cancellation, stating it “did not make the decision to cancel the festival. That decision was made by the Pemberton Music Festival LP.”
But Amanda Girling and James Dales — former directors of 1115666 — said the board’s third director, Stephane Lecure, 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.
Lawyer William E.J. Skelly, fielding questions on behalf of Girling and Dales, said in an email that 1115666 replaced Twisted Tree Circus as general partner “to give the current directors greater management control and transparency as to the financial affairs of the PMFLP.”
However, Geoffrey H. Dabbs, a Vancouver bankruptcy lawyer, said “It’s odd that you’d switch general partners a month before your bankruptcy.”
Dabbs wondered what happened to Twisted Tree Circus and its assets, and whether those assets were ever assigned to the new company.
Complicating the matter is Girling’s positions as a former director of 1115666 and current director with secured creditor Janspec. As a “related party” to both companies greater scrutiny will be put on her, Dabbs said.
“There’s a potential issue there with her being related and there’s a potential issue with the switching of the general partner a month before bankruptcy,” he said.
Meanwhile, 1115666’s move to gain control of PMFLP was not the first time someone has challenged Huka’s financial transparency.
In a civil suit filed April 2015 in district court in Tennessee, Rock the Ocean Productions LLC (RTO), which with Huka founded the Tortuga Music Festival, alleges Huka was late in paying RTO’s sole member Chris Stacey for his work on the 2013 festival and refused to pay him for 2014.
The suit alleges Huka provided “incomplete and inconsistent financial books and records” to Stacey while taking between $162,500 and $1 million in “producer’s fees.”
In 2016, Contemporary Services Canada ULC sued Pemberton Music Festival LP and Twisted Tree Circus, claiming it was owed $170,055 for security and crowd management services at the 2014 festival.
According to a statement of affairs provided last Friday by the Office of the Superintendent of Bankruptcy of Canada, PMFLP has liabilities of $16.7 million related to the Pemberton Music Festival, including $13.1 million to unsecured creditors such as 2017 ticket holders, who alone are out $8.2 million. The statement says PMFLP has deficiencies of $10.1 million.
Connect&GO, a Quebec firm that supplies RFID wristbands used for entry and services at some of the world’s largest music festivals and sporting events, is owed $34,793.30, according to the statement of affairs.
CEO Anthony Palermo said the debt is outstanding from the 2016 festival and it was the first time his firm had any issue with Huka, which has used its technology at six events.
“For us, we’ve had a great relationship with Huka for the past three years,” he said. “I’ve never seen any mismanagement.”
And while Palermo said there were never any “flags” that something was afoot, he’s now concerned ticket buyers feel as though they’ve been scammed.
Connect&GO’s technology was also used for the ill-fated Fyre Festival last month, but its costs were covered by a deposit organizers had paid. But Pemberton “burns me more than the Fyre Festival,” Palermo said.
“I feel like they probably could have pulled something off this year.”
There’s a potential issue with the switching of the general partner a month before bankruptcy.