One of the organizers of the failed Fyre Festival is asking a judge to throw out one of the dozen big-money lawsuits filed against him.
According to documents filed in New York Supreme Count, Fyre Festival founder Billy McFarland says that investor Oleg Itkin’s $1 million case should be dismissed, citing an arbitration clause in an agreement the two signed requiring disputes to be settled out of court.
“The Investment Agreement contains a broad arbitration clause requiring any disputes related to the agreement to be settled via arbitration—not in this Court,” attorney George A. Tsougarakis of Hughes, Hubbard & Reed wrote in the June 19 filing. “Accordingly, the Court should deny Plaintiff’s motion for summary judgment and instead dismiss or stay Plaintiff’s action in favor of the arbitration mandated by the agreement upon which his claim is based.”
Itkin claims he was swindled by McFarland and Fyre Festival, LLC into plunking down $700,000 for a festival that was promised to rake in millions from VIPs and Instagram influencers at the three-day event in the Bahamas. The investor says he was led to believe his loans would be paid back, and he is seeking to freeze McFarland’s assets to recoup his loan plus damages.
But McFarland in his response says Itkin’s lawsuit is really over a $200,000 investment into the festival in which he was only guaranteed to receive $240,000 back by May 1. McFarland claims he had put the money in an escrow account, the court documents say.
The additional $200,000 and $300,00 investments were different, McFarland says. “Neither agreement contained any personal guarantees by Mr. McFarland,” his motion says.
The spectacular disaster that was the Fyre Festival sent shockwaves throughout the concert industry, and has become a what-not-to-do manual for would-be festival organizers.
McFarland and co-founder and rapper Ja Rule had created the Fyre Festival in part to drum up excitement for booking app Fyre Media. Fyre Festival, scheduled for two weekends in April and May, had been heavily hyped as a high-end, exclusive festival on a private Bahamian island, with ticket packages ranging between $1,500 and $250,000. Major acts like Blink-182, Disclosure, Kaytranada, Migos, Rae Sremmurd, Tyga, Desiigner, Pusha T and Major Lazer were signed on.
But when festival guests started to arrive, they found conditions that were starkly different from the paradise they were promised. There were disaster-relief tents set up for shelter, rationed food, no medical care, scarce electricity and little to no help or information from festival staff. In the weeks and months that followed the doomed event, a dozen lawsuits have been filed against Fyre Festival organizers who want their money back, including a $100 million class action lawsuit.
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