Scott Yeoman is a NZ Herald reporter

Echo Festival: Artists chased for cash

Liquidators of collapsed music festival seek funds to repay punters.
The Flaming Lips are being pursued. Photo / AP
The Flaming Lips are being pursued. Photo / AP

Liquidators of a cancelled music festival are chasing the headline acts for money to give back to out-of-pocket fans and other creditors.

Ticketholders, suppliers and contractors were left seeking refunds after the January Echo Festival was canned.

A letter sent to creditors this week by the liquidators lists nine artists the liquidators want deposits returned from, including international acts The Flaming Lips, Jamie xx, and Courtney Barnett and New Zealand artists Marlon Williams, David Dallas and Avalanche City.

The liquidators say promotion company McLaren Falls Festival Ltd paid ticket money to secure the performers and accommodation. The two-day festival was planned for McLaren Falls, near Tauranga but was moved to Auckland's Vector Arena before being canned.

Melbourne-based New Zealand musician Marlon Williams. Photo / Nick Reed
Melbourne-based New Zealand musician Marlon Williams. Photo / Nick Reed
Dave Baxter from Avalanche City. Photo / Supplied
Dave Baxter from Avalanche City. Photo / Supplied

Matt Kemp, partner at liquidators Gerry Rea Partners, confirmed they were now "actively pursuing" the repayment of funds.

"We believe we have a strong case for recovery and will be taking all appropriate steps, including legal action, to maximise recovery for creditors," he said.

All nine artists were approached by the Herald on Sunday for comment, but only three responded. They declined to comment.

So far the liquidators have received 197 claims from ticketholders - totalling $84,377 - and 14 claims from other unsecured creditors, mainly suppliers and contractors, totalling $139,476.

Kiwibank is also owed $400,000, but has security over the debt.

Kemp said that typically secured creditors - Kiwibank in this case - and preferential creditors, for example the Inland Revenue Department, were paid before unsecured creditors if there were funds to distribute.

The first liquidation report, filed with the Companies Office on December 21, said the assets of the company appeared to be deposits it paid in advance, which have a book value of about $256,000.

This means that after the liquidators' costs and once Kiwibank claim - which is almost certain to happen - ticketholders, suppliers and contractors will be left with nothing.

Mr Kemp confirmed this. "It's unlikely unsecured creditors are going to get much of anything."

The letter to creditors also said that Eventopia - one of two ticketing agencies responsible for the event - was holding about $30,000 in ticket money that the liquidators are now trying to get back.

Eventopia general manager Martin Curnow said the agency was "working with the liquidators to agree a position".

"And as we receive instruction from the liquidators who control the festival we will continue to keep customers informed," he added.

Ticketmaster - the other ticketing agent for the festival - confirmed in December that all customers who bought tickets via the agency had received a full refund.

Other ticketholders have had success with charge-backs from their credit card providers.
The Commerce Commission has received five complaints relating to the Echo Festival. They are being assessed.

Paxton Talbot, the sole shareholder and director of McLaren Falls Festival Ltd and the organiser of the festival, did not respond to a request for comment.

Background and Eventopia's defence

Eventopia's parent company TEG Pty Limited also own TEG Live and Ticketek, as well as a number of other live entertainment and data analytics companies, including Allphones Arena in Sydney.

Both TEG Live and Ticketek are listed as members of Live Performance Australia (LPA) and follow its Code of Practice - which says all ticketing funds must be held in a separate bank account 'in trust' for the benefit of the purchaser, so they can be refunded in a timely fashion if the event is cancelled.

Eventopia is not and does not.

The company's general manager Martin Curnow said this was because Eventopia is "a four-year-old business and a growing business and it's just something we haven't signed - the LPA".

He said the advancing of ticket proceeds from the box office - customers purchase tickets and ticketing companies forward those funds through to the promoter - was a standard practice, particularly in the festival market.

"And Eventopia's done nothing wrong. Eventopia's complied by all laws in the practice of advancing that money."

He said ultimately, the financial responsibility starts and finishes with the promoter.

"Eventopia has absolutely complied by all laws and our agreement with the promoter."

Mr Curnow said that when McLaren Falls Festival Limited failed to secure the appropriate permits to hold the three-day camping event at McLaren Valley - and when they informed Eventopia of the venue, format and name change - Eventopia advised them that the "most straightforward solution for customers was to refund all customers who purchased McLaren Valley tickets in full immediately".

"The promoter could then invite customers to re-purchase new tickets to the newly named and revised Echo Festival. The promoter did not adopt this and advised Eventopia not to refund McLaren Valley customers and instead to process full or partial refunds upon customer request, which delayed the process for purchasers."

In December, leaders in the live entertainment industry in New Zealand questioned why Eventopia had transferred ticket money to the promoter before the event had taken place.

Chief executive of Eventfinda, James McGlinn, said at the time: "All legitimate Australasian ticketing companies, Eventfinda included, claim to subscribe to the rules of Live Performance Australia's Ticketing Code of Practice".

Industry veteran Ian Magan and the New Zealand Entertainment Operators Association (NEOA) that he chairs also weighed in and said that in the past - when legitimate New Zealand producers and promoters have suffered event cancellations for various reasons - full refunds were made to patrons from funds that were held in a secure or trust account, "usually by the ticketing company on the promoters' behalf".

The NEOA said at the time: "Our members are experienced professionals who abide by a code of ethics that hold the audience experience sacrosanct. None of our members condone poorly planned and executed events at the hands of a very few irresponsible people, nor work with ticketing companies who are unknown or not subject to New Zealand law."

- Herald on Sunday

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