A federal bankruptcy judge advanced the cause of creditors attempting to recoup losses on the disastrous Fyre Festival, which was scheduled to take place in the Bahamas earlier this year but was canceled at the last minute due to poor organization, Variety reported. At a hearing in U.S. Bankruptcy Court for the Southern District of New York, Judge Martin Glenn granted a request that Fyre Media Inc.’s financial documents be turned over to a trustee, who will attempt to untangle the company’s financial affairs and arrive at an assessment of its assets and liabilities. Judge Glenn signed off on the request by trustee Gregory Messer. Technically, Messer is representing the interests of Fyre Media as a court-appointed fiduciary that will attempt to wind down the entity in an orderly fashion. On a practical level, Messer represents the interests of anyone to whom Fyre Media owes money. Although a detailed financial picture has yet to emerge as to the extent of Fyre’s debts, lawsuits and public accounts indicate the company has outstanding obligations conservatively estimated at more than $10 million (without taking into account potential judgments in the outstanding civil lawsuits). In July, creditors moved to force Fyre Media into an involuntary chapter 7, which Judge Glenn approved in September, leading to this greenlight for an accounting forensics order that requires Fyre Media principal William “Billy” McFarland to produce documents and make himself available for questioning. The bankruptcy proceeding will be complicated by the parallel criminal investigation, with many sought-after documents likely already in federal custody.
