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Pemberton Music Festival bankruptcy docs: $16.7 million owed to creditors

Companies and individuals in Whistler, Pemberton, and Vancouver await June 6 creditors’ meeting

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The bankruptcy of the Pemberton Music Festival Limited Partnership (PMFLP) has left a wake of debt from Pemberton and Whistler to California, angry accusations from shocked service providers and ticket holders, and confusion over the composition and responsibilities of PMFLP and its relationship with Huka Entertainment.

Pemberton Mayor Mike Richman said that the festival had become a huge driver from an economic standpoint — it’s estimated that it has brought more than $200 million to the area.

“We are disappointed,” he said. “It was a great event to have in the town, a huge economic driver for certain, not just in the dollars and direct spending it brought in over the weekend, but also in the lead-up and the tear-down (of the festival). There was a lot of activity in town and all the local employment.

“It hurts, there’s lost opportunity because there are businesses that didn’t book anything for that weekend, be it weddings or tours or something else.”

It has been an important learning experience for a town like Pemberton, with 2,400 people, to host an event that brought in 45,000 festivalgoers a day in 2016, said Richman.

“It was certainly nice to have an event like that pull into town every year and drop that kind of money,” he said, adding that he hasn’t given up on the idea of a festival being based in Pemberton in the future.

“There’s lots of chatter,” said Richman. “What that amounts to at this point, I’m not sure, but I feel that Pemberton has proven that we can handle an event like this. All the participants who came loved it; the performers loved performing here.”

For now, though, Richman said the priority is to do a post-mortem on the corpse of this event and find out what happened.

Following the money

Statement of affairs (PDF 217kb) Secured and unsecured creditors owed money following the bankruptcy of Pemberton Music Festival LP. Source: Office of the Superintendent of Bankruptcy Canada

A Statement of Affairs made available by the Office of the Superintendent of Bankruptcy Canada (OSB) lists 130 secured and unsecured companies and businesspeople that are owed money following the festival’s collapse.

The statement for PMFLP, which is a public document, states $13,170,523 is owed in over 120 claims made by unsecured creditors, while there are 10 claims totalling $3,574,200 for two secured creditors — 1644609 Alberta Ltd., and Janspec Holdings Ltd. — both of which have listed addresses in Vancouver.

The OSB also stated that PMFLP has $6.6 million in assets and $10.1 million in liabilities.

Unsecured creditors in Pemberton, Squamish and Whistler owed more than $10,000 include 10 Eighty Production Technologies Inc. ($62,577.12), Carney’s Waste Systems ($36,664.28), AC Petroleum ($37,009.88), Festival Land Company ($13,064.90), Listel Whistler (doing business as) Bearfoot Bistro ($45,243.19), and the Pemberton Valley Inn ($12,000).

Even community groups are caught in the financial fray with the Lil’wat Youth Soccer Association owed $3,749.99.

Another major unsecured creditor is the Canadian taxpayer, with the Canada Revenue Agency owed $1,665,712.25.

As well, Pique Newsmagazine’s parent company, Glacier Media Group, through LMP Publication Limited, is an unsecured creditor owed $538.64.

Festival ticket holders represent the biggest group of unsecured creditors, with an unknown number of 2017 ticket holders being owed $8,225,000.

The documents do not state how long these amounts have been owed — the Pemberton Music Festival went bankrupt in its fourth year, after three festivals had taken place.

The four-day festival, due to take place from July 13 to 16, was planning a lineup that included Chance the Rapper, A Tribe Called Quest and Muse.

An Ernst & Young representative said the first meeting of creditors is due to take place at 10 a.m. on June 6 at HSBC Hall C.680, Robson Square, in Vancouver. Creditors will decide at the meeting if it will be opened to media.

According to a factsheet supplied by Ernst & Young, revenue for the 2017 festival to date was $8,225,000 and budgeted expenses were $22,000,000. It is expected that secured creditors will be paid first as a priority.

No one was available from PMFLP or its general partner 1115666 B.C. Ltd. or Huka Entertainment for an interview, but when speaking to Pique on May 1, prior to the bankruptcy announcement, Huka Entertainment chairman and chief experience officer A.J. Niland acknowledged the financial risks.

When asked if the high U.S. dollar had an impact on the festival, especially as Pemberton is Huka’s only Canadian festival, Niland said: “It does, indeed, have an impact. It always is a concern. We try to adjust for it in other ways, but it definitely has an impact on the festival because most artists are paid in U.S. dollars, and that has a big impact on the budget.

“It’s a bit of a guessing game, you know. You follow it the best you can, you try to mitigate it as best you can, but the dollar does what it wants to do and we have to live with the consequences.”

A statement from Huka Entertainment released on Thursday, May 18, stated: “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 cancelled.

“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.”

Businesses feeling the loss

Kirsten McLeod, the general manager of the Pemberton Valley Supermarket, said they were busiest prior to and following the festival each year, and business had grown steadily year-on-year.

“During the festival, it got busier after (the Chamber of Commerce) started the shuttles into (Pemberton),” McLeod said.

“We could foresee that our sales would have increased year after year if the festival had continued.”

She noted that the Pemberton community was also getting more creative in drawing festivalgoers to the village, giving the example of the local Lions Club setting up shower stalls for use by visitors.

“This year, it will be interesting to compare (our sales numbers) to last year over the time period, because now it’s gone,” McLeod said.

“There were lots of people working, coming in to get lunches, in the month prior to the festival. We’re going to really feel the impact.

“We were definitely shocked. I was expecting (the festival) to happen this year because they renewed all their permits. I would assume they wouldn’t have gone through that process if they didn’t think it would continue.”

McLeod also mentioned the $3 per ticket surcharge that went to the Pemberton Music Festival Community Fund that benefited local charities, schools and organizations in 2015 and 2016.

“The community embraced the festival, it’s definitely a loss to the community,” she said. “A lot of people are talking about it. A lot of people benefited from it being here: farmers, local businesses and workers.

“And I don’t think it’s just Pemberton. It’s Whistler as well.”

In Whistler, the Bearfoot Bistro had provided VIP catering in previous years at the festival.

Said the Bearfoot’s Marc Des Rosiers: “We were looking forward to a new edition of the Pemberton Music Festival and we were in the process to start planning with the people of the festival to discuss what their needs would be this year.”

Anger at ‘betrayal’

David MacKenzie, owner of the Pemberton Valley Lodge hotel and president of the BC Hotel Association, said he was caught off guard by the declaration of bankruptcy.

“The thing that surprises me the most, I almost find it criminal, is that they knew they had to make up such a deficit even from last year and (they) continued to sell tickets to the public,” said MacKenzie, adding that the hotel had provided lodging for emergency workers during past festivals and that he is not owed any funds.

“That sickens me. Yes, businesses will have a down side for the money they’re owed, but (what about) those poor ticket holders and people who scrapped their last dollars together in order to come camping and listen to music — you know, $800 or $1,500 to them is (equal to) thousands of dollars to a business.

“Yes, I’d say people feel betrayed. I feel like one of the lucky ones.”

MacKenzie was blunt when asked why he never got further involved in doing business with PMFLP.

“I was always very suspicious of what they were up to,” he said.

“I didn’t ever find them forthcoming. I had the 2008 festival to compare it to… and Live Nation (they) understood how to do business in Pemberton, how to do business in British Columbia… In 2008, they didn’t make a dime either. They lost money, but everybody got paid.”

Meanwhile in Los Angeles, the head of music at WME, Marc Geiger, also didn’t pull any punches in an interview on May 19 with Billboard Magazine.

He told the magazine that he would be going after the organizers personally. “This is fraud, pure and simple,” Geiger said.

He added: “They should not be able to run away from this. You can’t do this much damage to the festival ecosystem and think you can get away with it.”

WME represented several acts scheduled to perform at Pemberton this year, including Haim, Big Sean, and Tegan and Sara.

Advice for ticket holders

Initial advice from Ernst & Young (EYI) for ticket holders stated: “Unfortunately, there are no automatic refunds from PMF. As PMF is now in bankruptcy, it has no ability to provide refunds for tickets purchased. However ticketholders may file a proof-of-claim form as an unsecured creditor with EYI in accordance with the claims process.”

Ticketholders are also being advised to contact their own credit card providers to see if any relief can be found that way.

Fans who bought tickets through online vendor Ticketfly on the festival’s website were being categorized as unsecured creditors, with the website still selling tickets for a short period after the bankruptcy was made public, as of 3:50 p.m. on May 18.

In a Facebook posting added to its page on Monday, May 22, Ticketfly stated: “…The festival’s cancellation is a terrible situation for everyone involved, and is compounded by the organizers’ lack of willingness to do (the) right thing.”

One good-news story coming out of the collapse of the Pemberton Music Festival was courtesy of The Meadows at Pemberton Golf Course.

Pemberton residents who purchased tickets will get full reimbursements, said general manager Kevin McLeod. Around 430 tickets were sold starting from early May, with limits of four tickets per household. The Meadows had an arrangement with organizer Huka Entertainment that began during the festival’s first year, in 2014.

“We have the money in one of our accounts, we haven’t transferred it over (to Huka),” McLeod said.



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