Woodstock 50 Can Proceed, But Japanese Financier Doesn't Have to Return $18M, Judge Rules

Evan Agostini/Invision/AP
Michael Lang participates in the Woodstock 50 lineup announcement at Electric Lady Studios on March 19, 2019 in New York.

Michael Lang might be out of money, and quickly running out of time, but he hasn't run out of hope after a judge found that Dentsu could not cancel Woodstock 50, but also ruled the Japanese conglamerate didn't have to return the $18 million it withdrew from a bank account it shared with backers of the anniversary concert.

That leaves the festival effectively broke, for the time being, but that didn't stop Lang from declaring victory seconds after New York Supreme Court justice Justice Barry Ostrager's decision was posted to the docket this afternoon (May 15).

While Ostrager ruled that investor Dentsu and its subsidiary Amplifi Live acted outside of the powers granted to them in their contract with Woodstock 50 when they announced the cancellation of the festival on April 29, he also said Lang never controlled how money was spent and was not entitled to have the investment forcibly returned.

"The coritract gives Amplifi the right to approve all expenditures," Ostrager wrote in his 10-page opinion, that found Dentsu had the right to "mitigate its damages" from the music festival that had gone off the rails in recent months, noting "multiple permits necessary to conduct the Festival were not in place, tickets had not yet been sold, no budget had been agreed upon, necessary and expensive structural improvements to the Festival site and related areas had not yet started, and the production company essential to produce the Festival had withdrawn."

Ultimately, Woodstock 50 attorney Marc Kasowitz failed to meet "the high burden entitling it to a mandatory injunction forcing Amplifi to provide W50 with access to the $17.8 million W50 is not contractually entitled to control under (its contract between Dentsu/Amplifi and Woodstock 50)."

“We feel vindicated to hear that the court agreed with what we have maintained all along: Woodstock 50 was not entitled to access the festival bank account per the contract and thus any access now is denied and the $17.8M remains with Amplify Live,” a spokesperson from Dentsu said in a statement to Billboard.

"The court did not rule that Amplifi Live’s assumption of control over the festival was improper or alter that status in any way," the Dentsu spokesperson said. "While we understand that pursuant to the court’s ruling Amplifi Live cannot cancel the festival without Woodstock 50’s agreement, at this time we do not intend to further invest in the festival due to the issues noted by the court, as well as the compressed timeframe, and multiple health and safety concerns.”

The decision means that Lang has temporarily run out of money to fund the anniversary festival scheduled for Aug. 16-18 in Wakins Glen, New York, but Lang, who likely knew the judge's decision in advance after his attorney privately met with the judge at the conclusion of yesterday's hearing, was ready with a statement declaring victory.

"We have always relied on the truth and have never lost faith that the Festival would take place," Lang said in a statement to Billboard. "I would like to thank all of the talent and their representatives for their patience and support.  Woodstock 50 will be an amazing and inspiring festival experience."

The ruling opens up the very likely possibility of litigation, with Woodstock 50 likely suing Dentsu for improperly cancelling the festival and damaging both the event and the Woodstock brand. Dentsu will likely file a counter-suit, arguing that Woodstock 50 had breached its contract and misrepresented the capacity for the festival, which was said to be as large as 150,000 fans at one point. Superfly, the company hired to produce the festival, told reps with Dentsu and Woodstock 50 on more than five occassions that the event could not safely be held for more than 65,000 fans, and issued two breaches of contract notices as disputes between the two sides turned nasty.

In emails, Lang accused Superfly of sabatoging his festival after trying to force a plan on the investors that would scale down attendance and cause them to lose millions on the 50th anniversary event. In the same email exchange, Dentsu chief operating officer DJ Martin tells Lang the two should work with producer CID Entertainment to gain "leverage" over Superfly.

Three days before Dentsu cancelled the festival, Woodstock 50 investor Greg Peck and his attorney Alex Weimgarten held a meeting with an investor banker who agreed to approach Live Nation and AEG to step in and produce the festival. Made without the approval of Dentsu, the men also offerered to replace Superfly with CID Entertainment if either promoter agreed to the plan, that included a request for $20 million, according to multiple sources interviewed by Billboard with knowledge of the discussions. Both promoters declined the offer. (A spokesperson for Peck denies the outreach was made).

On April 29, nearly 12 days after issuing a breach of contract notice to Woodstock 50, attorneys for Dentsu informed Woodstock 50 of its intention to take "full control of the operation and production of the Festival," 

"We hereby notify you that the Festival is canceled," attorney Marc Greenwald wrote. "Canceling the Festival is in the best interest of all stakeholders and is the only responsible course of action given the significant cost overruns, revenue shortfalls, and lack of financing facing the Festival, all insurmountable obstacles that cannot be cured."

But Ostrager said Dentsu never had the right to cancel the festival and wrote that any cancellation would have to be agreed to by both parties in writing. 

"We are gratified that Justice Ostrager has ruled unequivocally that Dentsu did not have the right to cancel the Festival, and is immediately enjoined from cancelling the Festival," Kasowitz said after the ruling in a statement to Billboard. "Today's order is an important victory that means the show will go on for the fans, the talent, and the world, which was and remains Woodstock 50's mission."


 
Peck was jubilant and defiant, writing "Woodstock 50 is on!  We can't wait to bring this important event to the public this summer. We have one of the greatest lineups of talent of any music festival, and we are grateful to all of the talent for their loyalty and support."

Lang and Peck now need to raise $20 to $30 million to secure permits and pull the festival off, although it's unclear if artists who had been booked to play the festival will actually show up. It's also unclear if $30 million will be enough — in testimony, Martin said it's possible the festival needed $90 million to support a plan that had tens of thousands of fans descending on the upstate New York speedway.

As for Dentsu, the judge also barred their represenatives from speaking to the press or any vendors about the event, while Lang is free to promote the festival and continue speaking to the media. Last week he hired crisis communications firm Sitrick and Company, who represented embattled Hollywood producer Harvey Weinstein after he was accused of dozens of counts of sexual misconduct. A rep for Sitrick says the firm has not repped Weinstein in more than a year. 

What's next for Lang and Woodstock 50 is unclear. Dan Berkowitz's firm CID Entertainment has yet to confirm that it has agreed to produce the festival, and it's unclear how Lang will overcome the permitting delays he's faced with the New York State Department of Health.

Festivals 2019


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