FAYETTEVILLE -- It appears a legal dispute may be behind the cancellation of the Thunder on the Mountain music festival.
Two cases pending in federal court in Topeka, Kan., show Pipeline Productions and Backwoods Enterprises on one side and The Madison Companies and Horsepower Entertainment on the other have pending lawsuits against each other.
Organizers of the Thunder on the Mountain country music festival set to take place June 26-28 on Mulberry Mountain near Ozark announced Saturday the event was canceled, according to statements from the festival's production company, Pipeline Productions.
The Lawrence, Kan.-based company, which also organizes the Wakarusa and Phases of the Moon festivals on Mulberry Mountain, sent emails regarding refund information to ticket holders Monday. Refunds will be distributed within 90 days, according to the email sent by Pipeline.
Pipeline Productions posted on social media the festival wasn't canceled because of sponsors.
Pipeline Productions declined to respond Monday to requests by the Northwest Arkansas Democrat-Gazette for further information.
In 2013, the inaugural Thunder on the Mountain drew thousands of fans with performances from Toby Keith, Luke Bryan and Big & Rich, but the festival wasn't financially successful, said director Brett Mosiman in a December 2014 interview. Organizers postponed the festival last year to "refocus energy and effort," he said.
Headliners Carrie Underwood, Zac Brown Band, The Band Perry, Eli Young Band and Big & Rich, along with 50 other acts, were scheduled to perform at this year's Thunder on the Mountain.
One lawsuit alleges Mosiman, through Pipeline, made an agreement with Madison and Horsepower through a letter of intent, but Madison backed out after it appeared the music festival wouldn't make a profit this year.
Pipeline contends Madison agreed to pay Pipeline some $700,000 for a 51 percent interest in the event, $500,000 for advance operating capital operating and $80,000 to operate and produce the festival. After paying some $272,000, Madison now is trying to recharacterize its investment as a loan and refuses to fulfill its commitment or wants the agreement reconfigured to get a better deal, according to the lawsuit.
Pipeline/Backwood claims it has spent more than $700,000 in production costs needed for Thunder.
The lawsuit claims breach of contract and breach of fiduciary duty. It seeks actual and punitive damages.
In the second lawsuit, Madison and Horsepower sued Backwood, Pipeline, OK Productions, Mosiman and Nathan Prenger claiming they tried to force the plaintiffs into a business deal to which they never agreed. Madison and Horsepower contend the sides negotiated several scenarios under which they would invest in the defendants' music business, including Thunder on the Mountain.
The lawsuit claims the sides ultimately negotiated a non-binding potential agreement in which the sides would jointly own and operate the festival with Madison having a controlling share. Backwood and Pipeline lined up performers, but didn't have the money to pay talent deposits and Madison, as a show of good faith, offered a revolving line of credit. Madison claims it advanced Backwood and Pipeline $270,000 under the credit line.
Madison claims Backwood and Pipeline then tried to recharacterize the agreement to claim the line of credit was really an equity contribution, the partnership is a 50/50 general partnership and demanded a $400,000 contribution to the Thunder festival by April 13.
Madison contends Backwood and Pipeline haven't contributed any money to the festival and have, instead, used money from ticket sales and money borrowed from Madison to cover the talent deposits.
Madison and Horsepower want a judge to declare the letter of intent isn't a binding agreement and Backwood and Pipeline must repay Madison $270,000, plus 10 percent interest.
A letter of intent by Madison and Horsepower raised serious concerns about the way the Pipeline and Backwood accounted for expenses.
NW News on 06/17/2015