Back in April, following shortly after the cancellation of the inaugural Movement hip hop festival, the all-ages urban music festival Supafest announced that it would be postponing its original Easter dates until November 2013.
Originally going head-to-head with Live Nation’s Movement through the Anzac Day long weekend with a lineup featuring international rappers 50 Cent, T.I., Akon, Ne-Yo, Waka Flocka Flame, and more, rumours began circulating that Supafest 4 had been dumped by the venues at its Melbourne and Brisbane legs just a week away from its scheduled kick-off.
Promoter Dwayne Cross also optimistically told media that Supafest 4 would be a ‘drama-free’ event, with a “safe” and “promoter friendly” lineup, while downplaying the controversy of lineup dropouts and spiralling debts over Supafest 2012, with Cross’ Paperchase Touring owing investors nearly $2 million in debts, as well as refunds to disgruntled ticket-holders.
But on April 18th, Mr Cross issued a statement on the official festival website that Supafest 4 “will have new dates in November 2013,” but with around five weeks left and little updates from the festival’s long-dormant Facebook and Twitter accounts, the status of the all-ages festival has it pegged to be thrown onto the year’s large scrap heap of troubled hip hop events.
More worrying however, is that according to numerable comments on Supafest’s social media pages is that the event’s promoters still owe many ticket-holders refunds. As recently as last week, users had pushed for an update on the status of festival refunds, without reply.
@SUPAFEST can anyone tell me what's going on. I purchased 4 tickets for my kids but when postponed requested a refund which I'm still waitin
— Nelly (@Nelly66478063) September 17, 2013
The Supafest Facebook page is also rife with angered punters demanding updates on refunds and the festival’s limbo status. “I still have not received my refund, I Sent mine in as soon as you announced the postponement and have heard nothing, I have emailed and emailed, no reply,” wrote one commenter, while another complained: “Where is the professionalism expertise in this?”
Worse, there are many who are owed overdue reimbursement over Supafest 2012’s ticketing woes. Those ticket-holders were assured there would be compensation, even as Supafest organisers rolled ahead with announcing their 2013 festival plans despite surmounting debts of $2 million to creditors. But there has been little communication over the free tickets to this year’s event that festival-goers were promised in place of a refund.
Legal documents obtained by Tone Deaf indicate that there’s a deeper picture of financial trouble for Supafest than just the refunds owed to ticket-holders, with reports showing that companies associated with Supafest are in a dire financial state that closely recalls recent cases, such as the liquidation of companies tied to Future Music Festival, the financial collapse of Aussie promoter Andrew McManus, and the controversial collapse of Peats Ridge Festival.
At least three companies associated with Supafest and the directors/promoters have been placed into administration with debts totalling an astronomical $17 million to creditors.
Legal papers indicate that Supafest promoters, Paper Chase Touring And Entertainment Pty Ltd, is currently under external administration, with David James Hambleton acting as the court-appointed liquidator. A notice has been given for a meeting of creditors to the company for the 27th September with an agenda to “fix or determine” the remuneration of the liquidators and other businesses associated with the promotions company.
There are multiple court judgements against the company for payment defaults in 2012, prior to the announcement of Supafest 4 in April, showing credit debts including $12,767 owed to Blue Mountain Broadcasters Pty Ltd, $14,259 owed to Jpj Audio Pty Ltd, and $6,018 owed to Junior Media Pty Ltd.
Looking further back, it appears that Paper Chase Touring And Entertainment Pty Ltd has been in financial trouble for some time. In April 2011, there was an application to wind up the company that was later dismissed in May that year. Then, in August, a receiver was appointed to the company before vanishing in September. At least three companies associated with Supafest… have been placed into administration with debts totalling an astronomical 17 million dollars
In May the following year, there was yet another application to wind up the company and by February this year, a court approved the application and appointed a liquidator, who again dropped off a week later but managed to find an estimated $8,033,008.85 in debt.
Another liquidator was appointed after May 2013, and as recently as 2nd September – after a deeper investigation – found that around 54 creditors were owed an even larger sum: a whopping $10,000,238.22
Six of those creditors were secured, meaning that they get priority on any money that is recovered in the liquidation of the company, owed an incredible $5,833,770 between each of the six of them.
So far, liquidators have only managed to find a relatively measly $20,000 in the Paper Chase Touring And Entertainment Pty Ltd’s assets, while already $17,318.90 of that figure has been spent on legal fees and bank charges in the liquidators’ investigation, leaving a paltry $2,681.10 available to those owed money at this point.
In a presentation of accounts, David James Hambleton said they did not expect a dividend would be paid to any class of creditors and estimated that the liquidation would be complete by February 2014.
During these proceedings, another company by the name of Paper Chase Holdings Pty Ltd had also been placed into liquidation, although voluntarily, and was eventually wound up and deregistered. A third company also involved with the festival, named Supafest Pty Ltd, is also placed into administration.
The company owns the Supafest trademarks and is 46% owned by Paper Chase Touring And Entertainment Pty Ltd – with promoter Dwayne Cross installed as director – 15% owned by Dale Reeves, and 39% owned by Denison Corporation Pty Ltd, a company operated by former Supafest director John Denison (who was also the promoter behind the flopped Hype hip hop festival)
A presentation of the accounts relating to Supfest Pty Ltd was published by the administrator in March this year, uncovering $7,775,291 in debt but only $20,000 in cash assets, with a creditors meeting the same month determining an exploration of the company’s failure and a plan to get their debts back.
The chairperson of the March 2013 meeting, Gleen Crisp of Jirsch Sutherland, advised the creditors that keeping the Supafest name was in their best interests as it retained some value. It was also revealed that the trademark has been licensed out to another company operated by director Dwayne Cross, Chase Records Pty Ltd, who would be operating the Supafest 2013 festival.
In the same meeting, Cross advised the creditors that 61,000 had attended the festival in 2012, and that he expected over $3 million in savings from the 2013 edition based on costings of last year’s event, as he planned share costs such as transport and staging with other events, and would be changing the acts which were previously over paid for and did not result in higher attendances.
A Deed Of Company Arrangement was also discussed, where 80% of the secured creditors debt would be paid. In order to comply with the deed, the director and licensee of the trademark must ensure that by 1st May 2015, receipts from the licensee are sufficient to pay 80 cents in the dollar to the secured creditors; an amount equalling at least $5,499,099. Additionally a new investor had been arranged to loan $1 million into Supafest 4 before its postponement was announced.
Of course, despite licensing the Supafest trademark to Dwayne Cross for the April edition in hopes to delay the liquidation of Supafest Pty Ltd to recoup lost debts, it was postponed and with just five weeks out from its proposed new dates and the ongoing financial struggles from the companies associated with Supafest, its speculated that its unlikely to go ahead.
Tone Deaf reached out to Supafest’s publicity team, state promoters, and Dwaye Cross for comment on the story. They had not yet provided comment at the time of publication.
UPDATE: A statement from Chase Records director Dwayne Cross issued to Tone Deaf this afternoon reads:
We are Pleased to announce that Chase Records is In the final negotiations with a loyalty rewards and payment solutions company, and an Ip tv company that is listed on the Australian stock exchange to assist Chase records with the relaunch of SUPAFEST festival with the new dates to be released in the upcoming weeks this new venture will also establish SUPAFEST.TV in conjunction with Chase Records which will bring a programming schedule that consists of a blend of the urban scenes a list including music videos, exclusive footage, exclusive events, new artists and a variety of other urban content.This is supported by a platform that is preloaded in every LG tv in the world so this will reach no less than 40 million household tv’s [sic] around the globe.Chase Records is extremely excited about this development and will be able to disclose the full details of this transaction in the coming weeks along with the new SUPAFEST dates