Peats Ridge Creditors Say Finances “Don’t Add Up” As Hunt Begins For Missing Money
The newly appointed administrators handling the financial fallout from the Peats Ridge Festival collapse, building and construction firm Worrells, are following through on their indicated plans to bring Festival Director Matt Grant to court to give testimony under oath as part of a public examination of the collapsed company, which owes creditors nearly $1.2 million in unpaid debts, including $95,000 owed to the New Year’s Event headliners the John Butler Trio.
TheMusic reports that the new administrators are claiming that the ticket and bar numbers from the Glenworth Valley music festival held over New Year’s “don’t add up”, and despite Matt Grant’s claims he had been “open and transparent” about the festival’s financial woes when he first announced on January 18th that Peats Ridge was unable to cover its costs and would be placed into liquidation, creditors are scratching their heads as to where profits from ticket and bar sales have wound up.
Mr. Grant’s issued statement reads that despite “an incredible 2012 Peats Ridge Festival… that the income from ticket sales and other sources fell below that required to meet the costs of the event.”
Attendance figures for the 2012 festival are not currently available, but in a simple maths equation, to meet the $1.2 million figure owed to creditors, a little over 3,500 of the $340 Adult 3-day season pass would need to be sold, yet the original creditors report indicates that Peats Ridge declared only $140,000 of its own money on the books, which equals a little over 400 Adult season pass tickets sold.
Surely Peats Ridge were expecting more than that if they had risked booking headliners John Butler Trio for $95,000, and those ticket sales figures do not account for the money earned from the bar; for which Sorted Events, the beverage catering company who provided the bars onsite, are owed a whopping $283,726.
“You can do the simple math from the gate and the bar… and the numbers just don’t add up. This is a job now for the liquidators to do a forensic examination,” says Mal Tulloch of the Media, Entertainment & Arts Alliance (MEAA) – the union representing the artists, performers, and crew still vastly out of pocket who mobilised the decision to re-appoint new administrators.
As previously reported, Worrells was appointed as the new administrators after a meeting of creditors staged a proverbial revolt, removing the original administrator Jirsch Sutherland, “an insolvency practice that had previously represented the Peats Ridge Director on four separate occasions,” stated a notice from the MEAA, who described the removal of Jirsch Sutherland as a “significant win” in “[replacing] it with a liquidator of choice.”
The MEAA’s Mal Tulloch, who is representing more than 50 creditors owed approx. $750,000, said the decision to re-appoint was about making festival promoters accountable for their actions. “We worked collectively to demonstrate that promoters will be held accountable if they do the wrong thing,” said Mr Tulloch.
As part of Worrells investigation, they have also voted in a Creditors Committee to work closely with the liquidators in seeking financial reimbursement. Committee members include representatives from Butler Brown Touring Company (who are owed $95,579.50 for the John Butler Trio’s headline performance at Peats Ridge), APRA, Sorted Events, Constant Solutions, Billions Australia, Simon George, Top Shelf Productions and musicians including Cass Eager & The Velvet Rope, The Black Seeds, and Claude Hay.
Craig Tinkler of Worrells tells TheMusic - whose own publishers are owed $4,315 from Peats Ridge - that the forensics accountants are working on preparing their own creditors report after filtering through ex-administrators Jirsch Sutherland’s existing report.
“We’re probably looking at a public examination of the director and any other parties involved,” said Mr. Tinkler. A public examination of Mr. Grant would involve a court summons for a testimony under oath, and though no legal action can be directly taken from that testimony, it does provide strong evidence that can be used for subsequent proceedings.
A public testimony would also determine accusations from Sorted Events’ Julian Hartley that money in a joint account shared between the bar operators and Peats Ridge had “disappeared”. According to The Sydney Morning Herald, the claims are not yet verified, but Mr Hartley claims that Mr Grant advised him he had withdrawn ‘at least $190,000′ from a joint bank account on the advice of the liquidator, but those funds were taken without permission and not with the liquidator.
Jirsch Sutherland’s existing report reveals that Matt Grant had been the director of four companies that had been made insolvent since August 2011, including PERIFE PTY LTD, the original company behind Peats Ridge, meaning that this is the second time the festival has entered liquidation after the original company was wound up in late 2011, facing the ongoing financial fallout from the cancellation of the 2007 Peats Ridge due to extreme weather conditions.
The current creditors report will also investigate if Mr. Grant was running these companies, and knowingly incurring debt while insolvent, an offence under companies law which would most certainly lead to legal proceedings against the Peats Ridge Director in order to recoup the creditors’ lost money.
The MEAA are keen on aggressively pursuing the money trail, not just as a point of professional representation for its number of union members who first brought their attention to the hundreds of professional musicians, performers, and production crew owed from the festival, but also, says Mal Tulloch, because a positive outcome from the Peats Ridge fallout will strengthen the Alliance’s own industry position in setting a precedent against future collapses.
“There needs to be some sort of examination of why laws in this country allow this to happen,” said Mr. Tulloch, “and if there are laws – why are they being broken?”
It’s a tough gig running a festival taking years of experience to learn how to pull it off without a hitch – and even then you can’t predict the weather or how wasted the crowd will be. Join us as we count down the biggest disasters to strike the Australian festival market. Watch this slideshow »