SFX Entertainment sued by largest creditor
Alda Events, SFX’s Entertainment’s single largest unsecured creditor, has filed a lawsuit in the Netherlands against its bankrupt parent company, citing non-payment of monies owed from its partial acquisition by SFX in 2014.
According to reports in the Dutch press, Alda founders and shareholders David Lewis and Allan Hardenberg claim they are owed US$11.6 million each from SFX, which announced it had bought a 50% stake in the promoter – known for organising high-profile tours by Dutch DJs such as Armin van Buuren and Hardwell and for the A Day at the Park, Electronic Family and Amsterdam Music Festival events – in November 2014.
However, Lewis and Hardenberg were reportedly at the time only paid $1.7m each as part of a complex arrangement which would see SFX then progressively acquire the remaining equity over a period of five years.
Court documents show that SFX has in recent days prepared a settlement agreement with Alda requesting a debt relief order – presumably to pay at least part of what Lewis and Hardenberg claim they are owed – which it will put to the Delaware bankruptcy court on 26 May.
The details of the settlement are confidential – according to the documents, the “salient terms” of the settlement look something like this:
(You get the picture.)
SFX Entertainment went into administration on 1 February. The dance music conglomerate – which in a short period from 2013 to 2015 acquired, in addition to Alda, Tomorrowland promoter ID&T, Electric Zoo promoter Made Events, digital music store Beatport, Stereosonic promoter Totem OneLove, Spring Awakening promoter React Presents and ticket agency Paylogic – floated on the New York Stock Exchange in October 2013 for an initial public offering of $13 per share; by the end of January 2016 its share price stood at just 13¢.
IQ revealed four days later that many of its biggest creditors are SFX-owned promoters awaiting deferred purchase price payments, with Alda Events as the largest.