The bankruptcy of the Pemberton Music Festival Limited Partnership (PMFLP) has left a trail 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.
A statement of affairs made available by the Office of the Superintendent of Bankruptcy Canada 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 that $13,170,523 is owed over 120 claims to 119 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 addresses in Vancouver.
The Office of the Superintendent of Bankruptcy Canada 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 Pemberton Valley Inn ($12,000).
Both the Lil’wat Nation and Lil’wat Youth Soccer Association are owed money as unsecured creditors, $4,239.38 and $3,749.99, respectively.
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 Ltd., is an unsecured creditor owed $538.64.
And 2017 festival ticket holders represent the biggest group of unsecured creditors, with an unknown number of ticket holders being owed $8,225,000.
It was not stated for 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, which had been slated to take place July 13–16, was planning a lineup that included Chance the Rapper, A Tribe Called Quest and Muse.
The first meeting of creditors is due to take place at 10 a.m. on June 6, according to documents provided by the Office of the Superintendent of Bankruptcy Canada. No location was given.
According to a factsheet supplied by the bankruptcy trustee in the case, Ernst & Young, revenue for the 2017 festival to date was $8,225,000 and budgeted expenses were $22,000,000.
Information supplied by Ernst & Young stated when the bankruptcy was announced on May 18: “The Trustee will distribute proceeds to creditors on a priority basis based on a scheme of distribution specified in the Bankruptcy and Insolvency Act of Canada.”
It is expected that secured creditors will be paid first as a priority.
No one was available from PMFLP 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.”
The local fallout
Pemberton Mayor Mike Richman said that the festival had become a huge driver from an economic standpoint.
“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.”
“I wouldn’t say it’s devastating. It hurts, there’s lost opportunity because there are business that didn’t book anything for that weekend, be it weddings or tours or something else.”
He said it was 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.
“It was certainly nice to have an event like that pull into town every year and drop that kind of money,” Richman said.
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.
“I think there is a void in the market now. A couple of years ago we had Squamish [Valley Music Festival, which ended in 2016] and Pemberton running at the same time, and that was a 100,000-plus tickets sold between the two festivals.
“I think there’s a hole in the market … there’s no question that the brand took a bit of a hit. There’s a black eye, but I think another production company could definitely pick it up.”
Right now, though, Richman said the priority is to do a post-mortem on the corpse of this event and find out what happened.
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 they started the shuttles into [Pemberton] and people started finding town,” 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 it 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,” McLeod 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 years gone by at the festival.
Said Marc Des Rosiers of the Bearfoot Bistro: “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. This tends to be done at the last minute so we were just starting this process.
“We hadn’t, for example, committed to any equipment rental or anything like that.”
Anger at ‘betrayal’
David MacKenzie, owner of the Pemberton Lodge Hotel and president of the BC Hotel Association, said his company was not on the list of debtors.
The hotel had provided lodging for emergency workers during past festivals and this was the extent of its involvement.
“The thing that surprises me the most, I almost find it criminal, is that they knew they had to they had to make up such a deficit even from last year and [they] continued to sell tickets to the public,” said MacKenzie.
“That sickens me. Yes, businesses will have a downside for the money they’re owed, but [what about] those poor ticket holders and people who scraped their last dollar 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 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.”
MacKenzie said that this year bookings were now down for the period around the festival time, but felt that the popularity of Pemberton as a destination would fill his rooms in what he called “one of the best weekends of the summer.”
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. “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 the ticket holders
Initial advice from Ernst & Young 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.”
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 announcement was made public, as of 3:50 p.m. on May 18.
In a Facebook posting later removed from its page on Tuesday, May 23, Ticketfly stated:
“Since finding out about Pemberton Music Festival’s bankruptcy filing on Thursday, we have been working around the clock to resolve this issue on behalf of ticket buyer. By declaring bankruptcy, the organizers have tied up all funds, greatly complicating the matter. The festival’s cancellation is a terrible situation for everyone involved, and is compounded by the organizers’ lack of willingness to do that right thing. At best their actions are irresponsible, at worst, fraudulent.
“This is an extremely rare and complex situation that unfortunately can’t be solved overnight. While it will take time, we promise that we will be working diligently on behalf of ticket buyers to find a resolutions as quickly as possible.”
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]. We don’t usually transfer it over until the festival [weekend],” McLeod said.
The golf course is the only Pemberton company selling festival tickets, an arrangement set up strictly for local residents.
But reimbursements will be made slowly, McLeod says, and he asks for patience.
The Meadows will take a loss, he added.
“We’re going to lose out on the credit card fees,” McLeod said.
He estimates is will be 1.5 per cent on each transaction.
Reimbursements started being paid out on Tuesday, May 23.
