Mega Fest lawsuit may proceed

Published 12:00 am Tuesday, July 8, 2003

Last week's bankruptcy petition by the Tri-State Mega Festival Corporation may not stop a lawsuit that targets the event organizers.

The Kentucky-based Tri-State Mega Festival and Fair Corp. filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court's Eastern District of Kentucky in Lexington on July 2.

But, this may not protect the individuals named in a lawsuit filed in Lawrence County Common Pleas Court.

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Under Chapter 7 rules, the corporation would be released of its $220,628 in debts, but would be required to hand over the $2,921 worth of property claimed. The bankruptcy filing will delay lawsuits seeking to collect on the corporation's debts.

A creditors meeting will be held at 2 p.m. Aug. 18 at the U.S. Courthouse and Federal Building in Ashland, Ky. Judge William S. Howard will hear the case.

No decisions are made at these informal meetings, but it allows for creditors listed in the petition to be excluded from the bankruptcy ruling, said William R. Palmer, attorney for Rick Clark and the Tri-State Mega Festival Corp.

MacKay Marketing & Entertainment, of Bridgewater, Mass., filed a suit June 23 in Lawrence County Common Pleas Court, seeking $106,295 in damages, as well as a jury trial for the case.

In addition to the Tri-State Mega Festival and Fair Corp., the suit named the board of directors, Rick Clark and Gary Stevens of 1131 Terry St., Raceland, Ky., and Casey Kerns of 7464 County Road 15, Chesapeake.

The suit seeks $100,000 in punitive damages and $6,295 in compensatory damages. The suit cites breach of contract, interference with contractual and

business relationships, fraud in the inducement and other complaints that have allegedly damaged owner Gordon MacKay's ability to do business.

Robert Soles Jr., MacKay's attorney from the firm of Black, McCuskey, Souers & Arbaugh in Canton, said that his client still has several options.

"From our perspective, we have filed a complaint against the corporation and several individuals," he said. "Unless they have filed for bankruptcy individually, we will continue to pursue it against them."

How this aspect of the suit proceeds will be determined by the Lawrence County Common Pleas Court, he said. Normally, the local court will place a stay on the suit pending the action of the bankruptcy court. As of Monday afternoon, no stay of action or court date had been set for the lawsuit hearing.

Soles said he may file an action with the federal court that would allow the suit against the three individuals to proceed.

Palmer said that he expects Clark to file personal bankruptcy as soon as all of the paperwork is finalized. The attorney does not represent the other two individuals, and said he has no idea of their plans.

Overall, the whole situation is unfortunate, Palmer said.

He said Clark lost a "substantial amount" of money himself and certainly did not set out to cause anyone else to lose money either.

Event organizers Clark, Stevens and Kerns listed themselves as investors and cited losses of more than $86,000.

The corporation's bankruptcy petition listed assets of $2,921 and liabilities totaling $220,628.

However, the total may actually be higher because seven of the 33 creditors owed list an unknown amount of debt.

The Ironton Police Department and the Lawrence County Sheriff's Office are two of the creditors listed as unknowns. These departments reported that they were owed $4,820.

Several other creditors declined to comment on specific amounts, but said the debts were substantial.

Rodney Wright of R & R Tent Rental in Wheelersburg was one of the creditors named in the bankruptcy petition.

He is listed as being owed $8,584.89, but said it may be closer to $10,000.

He is weighing his options and said he may seek legal action, but is afraid it will just cost him even more.

"I will probably never get my money," he said. "This is a pretty good setback for me. I do not know what to do."

The Mega Fest was originally advertised as a five-day event, June 4 through 8, but was ended a day early after poor attendance and heavy rains left organizers scrambling to pay many of the acts.

While some of the bigger musical acts, including Trick Pony, Joe Nichols and Jennifer Hanson, were paid, many of the other performers were only paid a fraction of what they were owed.

Mega Fest organizers could not be reached for comment Monday.