TOPEKA, Kan. (KFSM)- The Thunder on the Mountain country music festival that was supposed to take place June 26 to 28 in Ozark, Arkansas was cancelled after financial disagreements, according to lawsuits filed in federal courts in Delaware and Topeka, Kansas.
When 5NEWS asked Pipeline Productions/Backwood Enterprises, the corporations behind Thunder on the Mountain, why the festival was cancelled, they sent this response:
“Regarding Thunder on the Mountain, you are welcome to search the public federal court case out of Topeka, KS: Pipeline Productions vs. The Madison Companies online.
We don’t have any additional comments beyond the information that you are able to find online.”
Pipeline/Backwood filed a lawsuit in Topeka against The Madison Companies and Horsepower Entertainment on May 21 for breach of contract and breach of fiduciary duty.
According to the lawsuit, Brett Mosiman of Pipeline/Backwood and Bryan Gordon of Madison/Horsepower entered into an agreement in November 2014 for the limited purpose of owning and producing Thunder on the Mountain. Mosiman’s proposal required Madison/Horsepower to provide funding for the festival through payment to Pipeline/Backwood of $750,000 for the purchase of a 51% interest in Thunder on the Mountain, $500,000 of operating capital and a payment of $80,000 to Pipeline/Backwood to operate and produce the festival.
The lawsuit states over a five month period from November 2014 to May 2015 Pipeline/Backwood personnel spent more than 4,000 hours producing Thunder on the Mountain as they created infrastructure, contacted vendors, set up ticketing and organized marketing and advertising campaigns. During that time, Mosiman also obtained commitments from approximately 50 artists and Madison/Horsepower funded $272,000 of its operating capital commitment to the festival by making music artist deposit payments, according to the lawsuit.
In the lawsuit, Pipeline/Backwood claims to have kept Madison/Horsepower informed on the progress of the music festival with daily emails and telephone communications about advanced ticket sales. Those sales numbers forecasted that Thunder on the Mountain would generate a loss in 2015 because “the expectation in the industry is that music festivals require several years of brand development to achieve profitability.”
When Madison/Horsepower learned of the project loss, they attempted to re-characterize their investment in the festival as a loan and refused to fulfill their commitment of $500,000 to produce Thunder on the Mountain, to fund their purchase of a 51% interest in the festival and to pay Pipeline/Backwood $80,000 for operating costs, according to the lawsuit.
However, records show Madison/Horsepower also filed a lawsuit against Pipeline/Backwood in Delaware federal court almost a month earlier on April 15. In the lawsuit Madison/Horsepower claims Pipeline/Backwood attempted to force them into a business deal to which they never agreed.
According to the lawsuit, negotiations between the two parties began in June 2014. Madison/Horsepower was considering investing in Wakarusa, Thunder on the Mountain and other Pipeline/Backwood businesses, but after Madison/Horsepower “raised serious concerns about the manner in which [Pipeline/Backwoods] accounted for expenses” they decided to limit the transaction to Thunder on the Mountain.
The lawsuit states Carrie Underwood and the Zac Brown Band agreed to perform, but Pipeline/Backwood had insufficient funds to make talent deposits, so Madison/Horsepower offered them a revolving line of credit to provide the necessary money. Madison/Horsepower advanced Pipeline/Backwood over $270,000 under the line of credit and Pipeline/Backwood acknowledged the loan would accrue interest, according to the lawsuit.
After 11 months of negotiations, Madison/Horsepower claims Pipeline/Backwood sent a letter in April 2015 attempting “to radically recharacterize the Parties’ relationship.” Pipeline/Backwood claimed the line of credit was an equity contribution and the negotiations created a 50/50 general partnership agreement between the two parties, the lawsuit states. According to Madison/Horsepower, their agreement with Pipeline/Backwood states that it is nonbinding. Additionally, Pipeline/Backwood demanded that Madison/Horsepower contribute $400,000 to the Thunder on the Mountain festival within one week without contributing any money themselves, according to the lawsuit.
In their lawsuit, Madison/Horsepower seek declaratory relief regarding their commercial relationship with Pipeline/Backwood in order to recover the funds they loaned to them in good faith.
Thunder on the Mountain was held on Mulberry Mountain in Ozark in 2013, but didn’t happen in 2014. The 2015 festival was canceled on June 13.
