A judge has placed the company that promoted Fyre Festival in bankruptcy, The Wall Street Journalreports. The decision was made in U.S. Bankruptcy Court, where three lenders were seeking to force Fyre Festival LLC into chapter seven bankruptcy following the remarkable disintegration of the Bahamas-based luxury music festival in April.
The three lenders filed their suit in July. They are hoping to find out what happened to the $ 530,000 they loaned the festival and whether any of it can be returned. According to Robert Knuts, the lawyer representing the lenders, Fyre Festival LLC did not contest the bankruptcy petition.
“If the money was burned up in the Bahamas we’re not going to be able to recover it but at least we’ll know where it went,” Knuts said.
U.S. Bankruptcy Judge Martin Glenn ordered the company to prepare documents listing whom it owes money to (Knuts noted that his clients were just three of a group of more than 20 people who loaned the festival over $ 4 million). A trustee is expected to take control of Fyre Festival LLC and will have the power to look at business records, potentially recover money for creditors and even force the festival’s parent company, Fyre Media Inc., into bankruptcy as well.
A rep for the festival did not immediately reply to a request for comment.
Billy McFarland originally launched Fyre Media to develop an app for booking artists and entertainers and later established Fyre Festival LLC in 2016 to build the festival, notably teaming with the rapper Ja Rule. Along with the bankruptcy case, McFarland, Ja Rule and others involved with Fyre Festival have been slappedwith anarray oflawsuits from lenders, ticket holders and vendors.
Regarding the bankruptcy case, Ja Rule’s lawyer, Stacey Richman, said that if the rapper “had his druthers,” the festival’s lenders would have already been repaid. She also noted that Ja rule “didn’t get a dime” for his involvement with the event.
McFarland was also arrested in June on federal charges of wire fraud. The promoter allegedly presented fake documents to investors and could face a maximum sentence of 20 years in prison.
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