A Kansas jury took less than six hours to end a five-year legal battle late Thursday (Feb. 13) over the canceled 2015 Thunder on the Mountain festival in Ozarks, Ark.
The event’s founder Brett Mosiman won a $7 million judgment against former business partner Bryan Gordon, securing what many thought was a long-shot victory against Horsepower Entertainment and Madison Companies, both owned and managed by Gordon, Seth Wolkov and Robert Walker. The Colorado businessmen claimed to be “billionaires” Mosiman said in court documents; he additionally claimed they bragged that they owned “so many hotels we can’t even count them” and regularly bought “$400 bottles of wine like they’re Chiclets.”
Gordon tried to keep his past comments and many other allegations away from the jury in the lengthy legal battle that stretched across at least least four states before being consolidated to a Kansas City, Kan. federal court room. After a two-week trial, the jury unanimously returned a verdict that found Gordon’s companies liable on multiple counts of breach of contract, breach of fiduciary duty and tortious interference over its involvement in bankrupting the 2015 festival, which was to be headlined by Carrie Underwood and Zac Brown Band.
“This verdict reaffirmed my belief in the justice system,” Mosiman told Billboard, who said he had to fight back from the brink of financial ruin in the summer of 2015 after having been “blacklisted” by several talent agencies. He also faced down a number of class action lawsuits as a result of the carnage the cancellation wrought on himself and his wife Brianna Mosiman.
“This case has always been about the big guy versus the little guy. It’s been about the independent concert promoter versus the hedge funds and private equity investors who have infected this business,” Mosiman added.
Gordon is the chairman of Madison Companies, a Colorado financial group that tried to enter the red hot North American festival business in 2014. After unsuccessfully attempting to buy the Bottlerock Festival, Gordon met Mosiman, a Kansas promoter behind the long-running Wakarusa festival and owner of the Bottleneck nightclub in Lawrence.
After months of negotiations, Gordon agreed in principle to invest $700,000 in Mosiman’s Thunder on the Mountain festival and contribute a $500,000 line of credit in exchange for a 51% interest in Thunder. Lawyers for both sides began working through the deal points, but a formal agreement was never signed.
That lack of an executed contract became the central disagreement of the lawsuit. Gordon’s lawyers argued that without a signed agreement, Mosiman had no case, but lawyers for the promoter said Gordon took control of the company after an oral agreement had been reached months earlier.
“Gordon personally authorized artist offers and directed Mosiman to encumber the joint venture with over $2 million of artist performance contracts,” federal magistrate judge Teresa James wrote in a Jan. 31 pretrial order. “Meanwhile, in early December 2014, Plaintiffs put Thunder on sale to the public with Gordon’s knowledge and approval. And in early January 2015, Mosiman announced the Thunder lineup publicly, again with Gordon’s approval.”
Despite the coordinated effort, the festival was a financial disaster. Ticket sales were abysmal — Mosiman had forecasted $330,000 in sales for March 2015 but only brought in $57,000 — and festival organizers were struggling to get a permit for alcohol sales. Once forecast to earn $300,000 in profit by March with just three months to go, the festival was now on track to lose $1.8 million, according to financial reports.
By the end of the month, Gordon attempted to unsuccessfully change the terms of the acquisition. Mosiman rejected the offer and warned that not abiding by the agreement created “dire and far-reaching consequences and damage” if Madison Companies backed out of their agreement just two months prior to the festival. Without the promised funding from Gordon, Mosiman was forced to cancel the event in mid-June 2015, two weeks before it was scheduled to occur.
Gordon responded by cutting ties with Mosiman and preemptively sued him in Delaware, saying the $272,000 Gordon had already paid in artist deposits was actually just a loan. Gordon also poached Mosiman’s “partners and employees” away for Gordon’s new business venture — the KAABOO festival, which he launched in Del Mar, Calif. in 2015 — and breached two other contracts tied to that event.
Lawyers for Gordon countered that he only advanced the $272,000 “because artists had to be booked if there was to be any chance of Thunder being held,” James wrote. “There would have been nothing to continue negotiating over if [Gordon] had not advanced money” for the talent deposits.
“Too much of the ‘who, what, where, when, why, and how’ was simply not contemplated,” defense attorney Whitney Casement wrote in a February filing with the court. “No reasonable jury could find that a contract had been created.”
But just because the men didn’t have an executed agreement didn’t necessarily mean that Gordon’s companies didn’t have contractual obligations to the festival. Contracts “may be oral or written, or implied from the conduct of the parties,” U.S. district court judge Kathryn Vratil wrote in her instructions to the jury before beginning deliberations. “Through their conduct and communications, parties can manifest an intent that is sufficient to form a binding contract even if they expect that they will later execute formal written documents.”
On Thursday, the jury sided with Mosiman and ordered Gordon’s companies to pay $1.1 million for breach of contract, $1.6 million for breach of fiduciary duty, $2.9 million for tortious interference and $1.5 million in punitive damages.
The case was anything but a slam dunk for Mosiman’s attorneys Jack D. McInnes, Anthony Bonuchi and William Skepnek, who survived three motions to dismiss and a motion for summary judgment. In the weeks and days leading up to the trial, lawyers were brought before a federal magistrate judge to show cause why their claims should not be dismissed over a litany of legal challenges of how damages had been calculated. While the case had been reduced in scope, the lawyers were very pleased with the outcome.
Besides, awarding Mosiman damages, “they rejected Madison (Companies) and Horsepower’s counterclaims for repayment of an alleged loan,” McInnes wrote to Billboard. “It was a complete vindication for Pipeline, Backwood and Brett Mosiman.”
Gordon’s legal troubles are far from over. He faces another lawsuit from Mosiman in California and is battling the new owners of KAABOO festival in Delaware, filing suit after the buyers saved KAABOO from cancellation in a last-minute $10 million acquisition. The eight-figure sale helped pay off talent costs for the festival, but Gordon’s companies still owe creditors nearly $9 million in debt and liabilities and face a potential lawsuit from investors who sunk $21 million to KAABOO. ?