The creditors of failed festival The Grass is Greener will only receive as little as three cents for every dollar owed.
The company behind the festival, Hand Picked Events and Marketing, went into administration on December 8 owing a whopping $3.9 million to contractors, suppliers and other creditors.
A report showed the festival had given more than $760,000 in interest-free loans to restaurants linked to its director and co-founder.
But the creditors have voted to sign a deed of company arrangement that means the businesses which received the funds will never have to pay them back. The agreement also means Hand Picked Events and Marketing will be allowed to continue to trade.
The largest creditor DN Holdings, which was represented in the meetings by Jade Mulholland, voted in favour of the agreement, saying a liquidation meant “we’d all get nothing”.
“We did vote for the DOCA to pass because it is the only way that us and the creditors are going to get any return,” Mulholland told The Gold Coast Bulletin.
“It’s in our best interests to get money back, we’re owed $1.25m so we are a creditor here, I do want money back.”
A report by administrators John Morgan and Dane Skinner of BCR Advisory said the festival’s fortunes were scuppered by the Covid restrictions introduced in 2020, which shut them down for two years. An attempt to expand outside of Queensland once restrictions lifted fell short with lower than expected ticket sales leaving the company in an unviable financial situation.