You might have heard about the doomed Fyre Fest that took place in early 2017. The music festival was promoted by models and celebrities like Kendall Jenner and Bella Hadid. These celebrities were paid by the festival promoters to promote it on their social media.
What Went Wrong at Fyre Fest?
Around 5000 people purchased tickets to Fyre Fest, expecting a fun two weekends of music and fun. Festival-goers were promised a luxurious music festival in the Bahamas and instead were welcomed to a disaster.
The only musical act to perform was a group of local musicians on the night of the attendees’ arrival. The guests had to sleep in disaster relief tents instead of cabanas. There was no cell or internet service, no water, and inadequate food. Many attendees found themselves stranded on the island for several days, unable to get a flight out.
Fyre Festival, LLC and Bankruptcy
After the disastrous festival, in July of 2017 several creditors petitioned the court to place Fyre Festival LLC into a Chapter 7 bankruptcy. The creditors had loaned the company, $530,000 and were looking for some answers.
In a previous blog post, I described an involuntary bankruptcy. To recap, an involuntary bankruptcy occurs when creditors force a debtor into bankruptcy. An involuntary bankruptcy is filed to try to preserve any remaining assets of a debtor so that the assets can be distributed to creditors. While the bankruptcy is filed by the creditors, the debtor still has a duty to provide information to the bankruptcy trustee and court.
Since the involuntary bankruptcy was filed, the bankruptcy trustee has had a hard time getting information from the company. Apparently, the organizer kept no accounting records and did not comply with orders from the bankruptcy court to provide financial accounting for the millions of dollars that were spent while preparing for the festival.
Recently, the bankruptcy judge approved a request by the bankruptcy trustee to issue subpoenas to several talent agencies that were involved in booking artists for the festival. According to the bankruptcy trustee, the festival organizer Billy McFarland’s
“failure to file required schedules and a statement of financial affairs has required the Trustee to uncover as much information as he can from third parties in order to gain a full understanding of (McFarland’s) financial affairs,”
the trustee wrote in his request to subpoena the agencies, which was approved January 3. The Trustee is trying to find out how McFarland blew through tens of millions of dollars of investors’ money, with little to show.
Contact a Lawyer for Bankruptcy Help
Separately from the bankruptcy, McFarland pled guilty last year to multiple counts of fraud and has been sentenced to prison time. If you are interested in hearing more about the Fyre Festival, both Netflix and Hulu have documentaries coming out soon about the debacle.
If you need to find a way to resolve your own financial problems, please contact one of our offices for a free consultation with one of our attorneys.