Fyre Festival attendees have been dealt a definitive blow to their prospects of recovering a material portion of their promised settlement.
In May a class action settlement ruling by the US bankruptcy court of New York was approved, effectively paving the way for the plaintiffs—consisting of 277 attendees—to receive up to $7,220 per person for a total settlement of over $2 million.
However, that initial figure has changed drastically due to the fact that the Bankruptcy Trustee, Gregory Messer, was able to recover only $1.4 million in assets from the failed festival company. To make matters worse, $1.1 million of that sum went back towards paying court and legal fees, leaving just $300,000 to service the festival's creditors, which includes ticket-holders.
Messer's job wasn't an easy one. Navigating disgraced Fyre CEO Billy McFarland's flawed and overall limited financial records proved difficult in identifying who actually benefitted from the venture, as the New York Post notes. McFarland is currently serving six years in prison for fraud.
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In a statement to EDM.com, Paul Young, an attorney and legal expert at Young, Marr & Associates, explained the nuances of Chapter 7 bankruptcy that were ultimately counteractive to the plaintiffs' cause.
"Typically, someone will file a Chapter 7 bankruptcy to discharge or eliminate their debts. If there are assets available, a court-appointed trustee will sell the property and disburse the proceeds among the creditors," Young told EDM.com. "Because there are never enough proceeds to pay every creditor, each will only receive a percentage based on what is available and what they were owed."
In this case, the pro rata style distribution system Young describes means ticket holders will receive a mere $288 each—just 4% of what the court had awarded them in April. In a blog post penned by Young, he notes that ticket-holders paid anything from $1,200 to upwards of $100K per person in order to attend.
"This is only a fraction of what they are owed by Billy McFarland, Fyre Media, and Fyre Festival, LLC," Young continued.
Unfortunately, these circumstances mean that the path to justice for ticket-holders has come to an unceremonious end in what has become one of music's most infamous events in modern history.