Electric Forest’s Delayed Lineup Due To Legal Battle Against SFX

A few rumors have been circulating in relation to the reasons behind Electric Forest’s delayed lineup. On February 9th, however, most rumors were put to rest when the White Lake Beacon sent out an email to subscribers detailing a court case between Electric Festival’s promoters, and SFX entertainment. Apparently, a huge back and fourth legal battle between the two parties has been taking place, which explains the lack of details regarding the festival.

The entire problem started when SFX tried to acquire Insomniac (one of the companies in charge of promoting the festival) and failed. They then attempted to buy Madison House in hopes of taking control of Electric Forest, but also failed; instead, Madison House merged with AEG. Following the failed buyouts, SFX tried to buy Double JJ Ranch, the place where Electric Forest is set to take place, in an attempt to invalidate the contract AEG, Madison House, and Insomniac have with the current owner of the ranch. If the buyout succeeded, SFX could cancel Electric Forest altogether and hold its own festival in Electric Forest’s place. The case was held in court on February 10th but adjourned until February 28th.

Many questioned Electric Forest’s silence regarding the court case, but they were quick to respond:

@StevenHlavARK the Festival is still happening! Working on an update for everyone.

— Electric Forest (@Electric_Forest) February 11, 2014

According to the original article, AEG Live and Madison House have already paid $62,082.99 on the lease towards the event and are due for another $62,082.99 on February 25th. AEG says it has already sold 21,000 tickets without even having announced the line-up. SFX just quickly made 21,000 enemies.

Check out the original article, and be sure to share your thoughts in the comment section down below.

An Oceana County judge is expected to decide Monday whether to issue a preliminary injunction regarding the Electric Forest music festival lease for the grounds at the Double JJ Resort in Rothbury.

Concert promoter AEG Live seeks a temporary restraining order and preliminary injunction regarding the lease first negotiated with concert promoters Madison House Presents in 2010. Madison House Presents merged with AEG Live in January and has been involved as a partner and promoter of the first two ROTHBURY festivals and subsequent the Electric Forest festivals.

In November, 27th Circuit Court Judge Terrence Thomas ordered the sale of the Double JJ Resort to Antler Bar Amusements (ABA) LLC after the Wilmington, Del. company last summer gained control of two bank loans made to Progressive Resorts LLC, which bought the ranch and resort for $9.75 million following bankruptcy hearings in 2009. In late September last year, the court awarded Antler Bar Amusements receivership of the resort with respect to operations, then Antler Bar Amusements requested and received court approval to sell the Double JJ collateral to itself as a secured creditor for the $7,628,522.31 balance due. The sale order contained a provision that allows Progressive Resorts to redeem the property and collateral, providing it pay the balance plus any additional advances made by Antler Bar Amusements at 11 percent interest.

Furthermore, according to the AEG motion filed last Thursday, the festival lease was included with the resort’s collateral. It indicates ABA would honor the lease, but because an ownership change occurred and ABA was the new owner, it could negotiate amendments to the 20-year lease. It further indicates that ABA and Double JJ have asserted during recent discussions that “although the sale order provided for the sale of all of the collateral, including the festival lease, they had no obligation under the festival lease.” The motion also claims that Progressive has suggested that it might seek to strip AEG of its rights under the lease by seeking to redeem selective portions of the resort assets, including the resort itself, but not redeem the festival lease, thereby severing the lease from the resort.

The motion goes on to claim that Progressive is in discussion with AEG competitor SFX Entertainment regarding the resort’s collateral. It points out that under the lease music events with more than 5,000 people cannot be held on the grounds without Madison House Present’s written consent.

“Progressive is considering severing the festival lease from the resort by a subsequent sale to SFX of the resort and various other assets, excluding the festival lease,” the motion reads. AEG also claims in the motion that SFX attempted to acquire Madison House Presents, but failed.

AEG Live and Madison House have already paid $62,082.99 on the lease toward this year’s event and another $62,082.99 is due Feb. 25. AEG says it’s already sold 21,000 advance tickets without even having announced its music line-up and has various land leases with local property owners and other arrangements with various vendors for this year’s event.

It claims if it loses control of the lease it will have to refund the advance sale tickets and its reputation along with that of the resort as a concert destination will be damaged. It wants the court to have all parties appear and show cause as to why a preliminary injunction should not be issued; to temporarily restrain and preliminarily enjoin any of the other involved parties from refusing to honor the lease; to restrain and preliminarily enjoin Progressive and/or its assignees from selectively redeeming only a portion of the resort assets and severing the festival lease and/or refusing to perform under the festival lease. It also asks the court to award all such other and further relief as it deems equitable.

Sources: Reddit, WRR