Featured Image Credit: Lost Lands Festival
Two festivals impacted by Lyte’s collapse have initiated legal action against the insolvent ticketing marketplace.
Chicago’s North Coast Music Festival and Ohio’s Lost Lands Festival have filed lawsuits against Lyte, which ceased operating two weeks ago and has commenced a quickfire sale of its insolvent business. Both are claiming to have been left hundreds of thousands of dollars out of pocket.
Lyte was the official reseller for Lost Lands, which took place over the weekend. In a filing in a Los Angeles court, Apex Management, the team behind the festival, said it is claiming more than $600,000 in damages, including ticket sales.
Its complaint accuses Lyte of breach of contract, money had and received, and fraud. The complaint seeks punitive damages and other relief based on the alleged fraudulent actions of the defendants.
“The complaint details how Lyte allegedly breached the agreement by failing to pay Apex its share of revenue from ticket sales and by not maintaining its ticketing platform,” according to the case complaint summary.
“Apex further alleges that Lyte and other defendants received funds exceeding $600,000 that belonged to Apex, causing financial harm.
“Additionally, Apex claims that Lyte made false representations and failed to disclose critical information, intending to deceive Apex, leading to damages in excess of the court’s jurisdiction.”
Apex has taken steps to ensure the cash it is claiming does not disappear, with Lyte having commenced proceedings that separate its assets from its unsecured debts. The Los Angeles court has approved the festival organisers’ request for a writ of attachment, allowing them to seize Lyte’s property before a judgment is entered, ensuring that Lyte’s assets are available to pay Lost Lands the money it is owed.
Scalping claims
Much of the Lost Lands filing is redacted, however Billboard reports that both lawsuits indicate that the festivals were scalping their own tickets in collaboration with Lyte.
Billboard’s Dave Brooks wrote: “Lyte was marketed to the public as a fan-to-fan ticket exchange, but documents from recent lawsuits show that Lyte’s main source of revenue came from working directly with promoters to scalp hundreds of thousands of dollars’ worth of VIP tickets for their events to Lyte, which would then resell those tickets at large markups, splitting the upside between the promoter and itself.”
Brooks added: “According to one court document, of the 3,064 tickets listed on Lyte for the North Coast Music Festival (NCMF) in Chicago only 89 tickets came from fan listings.”
The Billboard story suggests NCMF made $69,581 from the resold tickets, with the festival also owed almost $290,000 in revenue from tickets it listed on Lyte.
A report from The Festive Owl suggests the plaintiffs feel that the Billboard story inaccurately characterises the festivals’ relationship with Lyte.
As reported yesterday, Lyte is forecasting a doubling of its gross profit next year despite initiating a liquidation of its business using a procedure designed to clear unsecured debts.
A quickfire sale of the company is under way, with suitors told they have until October 11 to submit an offer. In a prospectus sent out to potential buyers and seen by TheTicketingBusiness, Lyte – which ceased operations more than a week ago – has forecast a gross profit of $5m this year and $10m in 2025.
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