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Judge says Ticketfly can recover funds it lost after Pemby Fest cancellation

Ticket vendor reportedly lost $7.9M it refunded to ticketholders following event's bankruptcy last year

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Ticketfly Canada will be allowed to try to recover funds it lost after the Pemberton Music Festival was cancelled last year and its organizers filed for bankruptcy, according to a ruling this month in B.C.'s Supreme Court.

Pemberton Music Festival Limited Partnership (PMFLP) filed for bankruptcy last May, having lost approximately $47 million over the event's preceding three years. The cancellation came just two months before the four-day festival was set to return, and weeks after tickets had already gone on sale.

At the time, ticketholders were told to seek refunds through their respective credit card companies. The credit card companies paid out the ticketholders and charged the cost of the tickets back to Ticketfly, which totalled $7.9 million in "chargebacks."

The trustee, Ernst & Young, turned down two claims from Ticketfly to recover its costs, citing an agreement the company had signed with Huka Entertainment to be the event's exclusive ticket seller, and not PMFLP itself. New Orleans-based Huka Entertainment was contracted by PMFLP to organize the festival.

But in her Aug. 3 judgment, Justice Nita Iyer dismissed an earlier ruling allowing the trustee to reject Ticketfly's claims, as Ticketfly had previously been instructed by the producers to remit any revenue from advanced ticket sales to PMFLP.

The judge concluded "that the Trustee's disallowance of the subrogated claims was a palpable and overriding error and cannot stand," pointing out that PMFLP could not deflect Ticketfly's claim to Huka while also being entitled to the revenue the vendor had collected from advance sales.

"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," Iyer wrote in her judgment.

Ticketfly has until Aug. 31 to submit to the trustee a listing of the names of each ticket buyer, the purchase price paid for tickets, and other related information.

The festival was set to run from July 13 to 16, 2017, which would have marked the fifth edition of the event, and the fourth with Huka as producer. Huka laid off some of its staff following the festival's bankruptcy and cancellation last year. In June 2017, Huka CEO Evan Harrison left the company.

The full judgment can be viewed at www.courts.gov.bc.ca/jdb-txt/sc/18/13/2018BCSC1310.htm.

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