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Fyre Festival company forced into bankruptcy

By | Published on Friday 1 September 2017

Fyre Festival

The company behind the disastrous Fyre Festival has been put into bankruptcy by a US judge, according to the Wall Street Journal. Though it’s Fyre Festival LLC currently facing the bankruptcy proceedings, rather than parent company Fyre Media Inc.

As much previously reported, the inaugural Fyre Festival promised ticket buyers a luxury experience in the Bahamas. But the event collapsed just as its customers were arriving on the island of Great Exuma, as it became clear that the venture’s inept management weren’t capable of delivering a basic festival, let alone the premium set up that had been promised.

A stack of lawsuits has since piled up against the companies behind the event, and the founders of Fyre Festival and the talent app it was designed to launch, Ja Rule and Billy McFarland. The latter also faces criminal charges for fraud.

The bankruptcy stems from one of the lawsuits. Three financial backers who together loaned Fyre Festival LLC $530,000 went legal in July, requesting that the company be declared bankrupt.

There’s only an outside chance doing so will get the three financiers their money back – given the state of disarray at the asset-lite Fyre business – though placing the company in bankruptcy should shed some light on how all the money McFarland raised from investors and ticket-buyers got spent.

A lawyer working for the litigants, Robert Knuts, confirmed as much to the WSJ, telling the newspaper: “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”.

A trustee is now likely to take control of Fyre Festival LLC, who will be empowered to go through the company’s finances and paperwork, and to recover any monies if that’s possible. Said trustee could also potentially force Fyre Media Inc into bankruptcy too.