Fyre Festival bankruptcy case leaves attendees with just 4% of what they are owed – EDM.com
Fyre Festival attendees suffered a severe blow to their chances of recovering a significant portion of the promised settlement.
In May, a class-action settlement decision by the U.S. Bankruptcy Court in New York was approved, effectively paving the way for plaintiffs – made up of 277 participants – to receive up to $ 7,220 per person for a settlement. total of more than $ 2 million.
However, that initial figure changed dramatically due to the fact that bankruptcy trustee Gregory Messer was only able to recover $ 1.4 million in assets from the bankrupt festival company. To make matters worse, $ 1.1 million of that was spent on paying court fees and legal fees, leaving just $ 300,000 to serve the festival’s creditors, including ticket holders.
Messer’s job was not easy. Navigating the imperfect and overall limited financial records of disgraced Fyre CEO Billy McFarland has proven difficult to identify who has actually benefited from the company, as the New York Post Remarks. McFarland is currently serving six years in prison for fraud.
In a statement to EDM.comPaul Young, lawyer and legal expert at Young, Marr & Associates, explained the nuances of Chapter 7 bankruptcy that ultimately worked against the plaintiffs’ cause.
“Typically, someone will file for Chapter 7 bankruptcy to meet or eliminate their debts. If there are assets available, a court-appointed trustee will sell the property and pay the proceeds between the creditors,” Young said. EDM.com. “Because there is never enough product to pay each creditor, each will only receive a percentage based on what is available and what was owed to them.”
In this case, the pro-rata distribution system Young described means that ticket holders will only receive $ 288 each, just 4% of what the court awarded them in April. In a blog post written per Young, he notes that ticket holders paid between $ 1,200 and over $ 100,000 per person to attend.
“This is only a fraction of what is owed to them by Billy McFarland, Fyre Media and Fyre Festival, LLC,” Young continued.
Sadly, these circumstances mean that the path to righteousness for ticket holders ended unceremoniously in what has become one of the most infamous musical events in modern history.