Woodstock 50’s Legal Fight With Former Investor: What We Learned – Rolling Stone
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Woodstock 50’s Last Stand: 6 Key Things We Learned From New Court Papers

The organizers’ war against former investor Dentsu is going to court next week in a last-ditch effort to save the beleaguered festival

Woodstock co-producer and co-founder, Michael Lang, participates in the Woodstock 50 lineup announcement at Electric Lady Studios, in New YorkWoodstock 50 Lineup Announcement, New York, USA - 19 Mar 2019

Woodstock co-producer and co-founder Michael Lang is part of the group that filed legal papers against former investor Dentsu for backing out of Woodstock 50.

Evan Agostini/Invision/AP/REX/Shutterstock

Less than two weeks after investor Dentsu Aegis announced it was pulling the plug on Woodstock 50, the festival’s organizers fired back at the company on Wednesday through the courts. In a filing with the Supreme Court of New York, Michael Lang, the original festival’s co-founder, and other organizers requested an injunction that would, among other things, force Dentsu to hand over $17.8 million in disputed funds and continue work on the festival. A hearing on the matter is expected to take place on Monday in New York.

Woodstock’s filing contains many surprising revelations as to why the festival became imperiled, both in its pleas to the court and its attached evidence, a Financing and Production Agreement between the festival and Dentsu subsidiary Amplifi. Although it contains concrete examples about how the two companies worked together, it also raised many questions about who was at fault. Although those issues will ultimately be settled by the Supreme Court, we’ve gone through the filing and highlighted six key items that offer insight into the war over Woodstock. (A rep for Dentsu declined to comment on the injunction request.)

1. This may be Woodstock’s last stand. Until the petition was filed, Woodstock 50 organizers, especially Lang, were publicly expressing confidence in finding an additional backer or backers for the festival. But the petition makes it clear that Woodstock 50 may fold up its psychedelic tent if the court does not force Dentsu to fork over $6 to $9 million from the festival’s bank account. “The loss of W50’s one-time opportunity to stage the festival cannot be recompensed through monetary damages,” organizers write in the petition. “Absent the grant of injunctive relief, including the restoration of the festival’s funding for production costs, W50 will not have the opportunity to stage this iconic and unique event.” Without the funds, they add, Woodstock 50 planners “will be unable to produce the festival, secure the permits, retain the talent and attract the ticket purchasers.” The court order is now a do-or-die situation for the festival.

2. Capacity limitations may have been a sticking point between Woodstock 50 and Dentsu. When Woodstock 50 and Dentsu drafted up their production agreement, one of the provisions said that the “approved budget” would be based on the assumption that the fest could sell 150,000 tickets. The companies were to regroup this past March to decide whether that number was still accurate. “If … the projection for the festival’s ticket sales should be increased or decreased by more than 30,000 tickets from the original assumption of 150,000 tickets … the [companies] will adjust the approved budget.” A source close to Schuyler county representatives told Rolling Stone that Watkins Glen International, where the festival was supposed to take place, had told Woodstock 50 that it could accommodate only 75,000 – 100,000 people. The county would only permit 75,000. It’s safe to assume that if the original expected turnout were cut in half (meaning half the possible revenue from tickets), Dentsu might not have been happy with those prospects. It’s unknown, though, what happened in March between the two parties with regard to adjusting the projected budget.

3. Organizers admit everything wasn’t going swimmingly. The petition maintains that the festival was “proceeding apace with planning and implanting key logistics to produce the festival.” But it admits there were “significant issues” yet to be worked out. As of the day of filing, the festival still did not have permits for the venue in Watkins Glen, New York, and not a single ticket had gone on sale — a perilous situation for a multi-day festival scheduled to take place in just a little over three months.

4. It’s still unclear which artists will be obligated to perform. A clause in the petition explains that the organizers “shall jointly enter into agreements with the following major vendors,” which include “artists receiving more than $500,000 to perform at the festival.” Which acts may be legally forced to play the festival — and which ones could wriggle out of it — remains a major cloud hanging over Woodstock 50. Some lesser-known acts have told Rolling Stone they signed only with Woodstock — which means they would be legally obligated to perform with Dentsu out of the picture — but reps for three major talent agencies — CAA, WME and Paradigm — told Billboard that their clients are signed only with Dentsu. (Woodstock organizers insist that every artist has at least Woodstock 50 LLC as a signatory to the contract.) If the latter situation concerns some of the big names involved in the undisclosed agreements with Dentsu, Woodstock 50 could lose some of its headline acts.

5. It’s unclear who controls the money. One of Woodstock 50’s major complaints is that Dentsu allegedly withdrew $17,800,000 from the “Festival Bank Account.” The financing and production agreement the festival’s lawyers included in its filing defines the Festival Bank Account as one to be used for event-related revenue (other than that from ticket sales). Amplifi, the Dentsu subsidiary working with Woodstock 50, was to create this account, and in one section of the contract, the language says, “Amplifi shall control all payments from the Festival Bank Account. … Woodstock 50 will be granted read-only access to the Festival Bank Account.”

This raises many questions since Woodstock 50 claims Amplifi allegedly stole from it. If Dentsu is the company that controls the account, and Woodstock 50 has read-only access, what does it matter if the money is in it or not? From the way the account is described in the contract, it reads as though Woodstock 50 wouldn’t be able to control it, though it’s unclear if there are any further amendments to the agreement.

6. Woodstock 50 claims Dentsu took the nuclear option in deciding to exit the festival. The production contract between Woodstock 50 and Dentsu states that “any decision to cancel the festival shall be jointly made in writing by the parties.” Dentsu claimed authority to cancel the festival, according to the injunction request, by invoking the “control option” (a nuclear option) of the two companies’ production agreement. The language in the contract asserts that if Woodstock 50 engaged in a “serial breach” of the contract and did not get Amplifi’s approval for certain matters, the contract would be canceled. “Amplifi shall … have the option to take full control of the operation and production of the festival by a notice in writing to Woodstock 50 and cause Woodstock 50 and its officers and employees to cease all festival-related activity.”

Woodstock’s lawyers claim Dentsu staged a two-pronged “attack” on the festival on April 29th. Its lawyers sent two letters to Woodstock 50. One claimed that it was invoking the “control option” in its contract with the festival. The second said that with the authority of the control option, it was canceling the event. Since the letters are not public, it’s unclear what grounds Dentsu stated as reasons why it should be allowed control of the festival. Woodstock’s legal filing claims that it was not a mutual decision and alleges that Dentsu illegally shut it down. “No such joint decision was ever made, much less memorialized in a writing,” Woodstock 50’s lawyer wrote in the filing. “Indeed, to the contrary, at every point in time, W50 has stated its intention that the festival must go on.” Since Dentsu invoked the “control option” in the production contract, though, it may have had the right. The Court will have to draw a conclusion on this next week.

 

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