KAABOO Co-Founder’s Ex-Wife Claims He Misappropriated $22M to Fund Festival
KAABOO co-founder Bryan Gordon's ex-wife has sued him for allegedly misappropriating $22 million from a fund the two set up after their divorce in 2011.
KAABOO co-founder Bryan Gordon is facing a new lawsuit over the California festival he launched in 2015, this time from his ex-wife, who accuses him of misappropriating $22 million from a fund the two set up after their divorce in 2011.
Lawyers for Molly Kingston, who was married to Gordon for 12 years, accuse the 58-year-old chairman of the Denver-based Madison Companies of transferring millions out of a holding company the two created named Kingoschu Family Partners. Gordon allegedly used the money to pay for the KAABOO festival, defend against a lawsuit filed by a former business partner and buy a $1.6 million house in Vail, Colorado.
“Over the last four years, Gordon has engaged in a brazen, and at times surreptitious, unauthorized pattern and practice of misrepresentation, fraud, and self-dealing,” Kingston’s attorney Maxwell N. Shaffer wrote in a complaint filed on March 23 in Colorado court, where Kingston sued Gordon on charges of wrongful conduct, breach of fiduciary duty, fraud, civil theft and breach of contract. Billboard reached out to both Gordon and Shaffer for comment and did not receive a response by press time.
Gordon, a former Bear Sterns investment banker turned real estate investor, launched the KAABOO festival in 2015 at the Del Mar fairgrounds in San Diego County, raising millions of dollars from outside investors to finance the festival that was headlined in its first year by No Doubt and Zac Brown Band. In 2019, Gordon expanded the festival to the Cayman Islands and then to Dallas, where he partnered with Cowboys owner Jerry Jones for KAABOO Texas. That festival lost millions, which led to a liquidity crisis for the company, prompting Gordon to later sell the main Del Mar KAABOO festival days before it opened.
According to internal documents obtained by Billboard, Gordon still owes $9 million to outside creditors, including $3.9 million to an investment group controlled by the Jones family. He also listed $31.9 million as “total management invested equity.” Lawyers for Kingston claim that part of Gordon’s investment was misappropriated from an account that had held a portfolio of investments valued at $40.5 million.
According to court documents, Gordon first approached Kingston about the festival in 2014. She agreed to invest $1.5 million from the fund in KAABOO “but indicated that she was only willing to risk the amount that Gordon proposed to initially invest.”
The day before the festival launched on Nov. 18, 2015, lawyers for Kingston said she noticed an additional $1 million wire out of the account to a receiving account for KAABOO.
“Kingston confronted Gordon while in attendance at the festival about this additional, unauthorized investment of KFP funds,” the lawsuit reads. “Gordon seemed uneasy, but nonetheless attempted to shrug it off, characterizing the transfer as a very short term loan that would be repaid.”
In the years that followed, Gordon allegedly continued to move money out of the account into shell companies he controlled, eventually totaling $22 million, Kingston’s lawyer says. He also allegedly loaned himself $4 million “for personal reasons” and allegedly spent millions more on unauthorized business ventures and legal bills. In August, Kingston served Gordon with a breach notice and Gordon allegedly agreed to freeze the accounts, but allegedly continued to draw from the account.
Kingston filed her lawsuit in Denver but on Monday U.S. District Court judge Daniel Domenico agreed to transfer the case to Delaware because of a previous agreement between the couple to settle disputes in that state.
“I vehemently deny any wrongdoing or alleged fraud by Plaintiff and greatly desire to tell my side of this case. At this juncture, however, I focus on venue-related facts,” Gordon wrote in a sworn declaration dated April 3.
The new litigation is now the fifth lawsuit Gordan is facing related to KAABOO to five, including a legal battle with Virgin’s live entertainment and festival division which paid $10 million for the festival in 2019.
After the sale, Gordon sued and then was counter-sued over accusations he misrepresented the festival’s financial viability. He’s also facing two new lawsuits by former partner Brett Mosiman over the collapse of the Thunder on the Mountain festival in Arkansas, and is requesting a new trial in Kansas after a jury issued a $7 million judgement against him for breach of contract claims filed by Mosiman.
If that wasn’t enough, Gordon is also facing a $10 million lawsuit by his former business partner Ron Dickerman in New York and he just wrapped up a four-year-old bankruptcy case in Delaware connected to one of the investment funds the former investment banker operated. In that case, liquidators from the Cayman Islands where the fund was based discovered that Gordon had allegedly used money from a Napa winery owned by the fund to purchase a sponsorship for 2015 KAABOO festival while charging investors more than $8 million to manage the fund.