A legal action over the alleged exclusion of music promoter John Reynolds from involvement in managing the Electric Picnic festival, including band selection, has been adjourned to facilitate mediation talks.
Among a series of claims, Mr Reynolds has alleged the band The Killers was imposed against his wishes as a joint headline act for the 2012 Picnic because the majority shareholders in the festival company, the FRD Group, needed that band for their Berlin festival a week later.
He claimed the FRD Group are pursuing a “one size fits all” principle for festivals to the detriment of the Picnic’s personality and uniqueness. The Picnic aimed to be a festival which bands wanted to play at and the focus was on the whole festival, not a headline act and he believed its trading loss last year was down to band selection, he said.
In denying his claims, Melvin Benn, managing director of Festival Republic Dublin Ltd (FRD), argued the choice of The Killers did not cause the 2012 losses which he believed were rather due to ticket prices being too high given the economic clinate last year. FRD planned to make this year’s Picnic more affordable, he added
He also denied Mr Reynolds has been excluded from managing the Picnic or that the FRD Group’s controlling companies, Live Nation and Gaiety Investments, want to make the Picnic just a part of their stable of festivals and outdoor events.
Mr Reynolds’s POD Music Ltd has brought proceedings against FRD which in 2009 bought for €4.2m a 71 per cent stake in EP Festivals Ltd, a subsidiary of POD Music, alleging breach of a March 2009 shareholders agreement concerning the Picnic, and oppression of the petitioner’s interests.
In proceedings under Section 205 of the Companies Acts, Mr Reynolds claims a refusal to allow him operate the festival as envisaged was causing considerable hardship and risk to POD Music.
Mr Justice Peter Kelly agreed today to transfer the case to the Commercial Court but, on consent of both sides, adjourned it to allow for mediation. Aidan Redmond SC, for FRD, said and Martin Hayden SC, for POD, said there had been engagement between the sides.
Mr Reynolds and Mr Benn, of Twickenham, Middlesex, England are directors of EP Festivles Ltd while Selena Holliday Emeny, Surrey, England, is company sectetary.
Mr Reynolds said he had in 2004 founded the festival, held at Strabdally estate, Co Laois, and this year’s Picnic is to run on August 31st and September 1st next.
He said the festival was very successful but in 2009 needed outside investment. Annual turnover varied between €8.5m in 2009 and €6m in 2011. While currently loss-making, he believed, if he was allowed manage the festival without interference, it has “enormous potential”.
Mr Benn made clear in 2009 the FRD group intended to take “a light touch” regarding operation of the festival, he said. However, in 2012, there was some interference in crucial matters, particularly band selection and this year he had been removed from “any meaningful role”.
In a replying affidavit, Mr Benn said he has been promoting unqiue festivals since 1979 and Mr Reynolds had presented a wholly one-sided account of how the management of the festival has worked both before and after 2009 and had also exaggerated the relatively few differences which had arisen personally between the two men.
There was no evidence POD Music Ltd has been oppressed and FRD had openly offered to hold POD Music safe from any losses while giving it its share of the profits from this year’s festival, he added.
When FRD acquired its 71 per cent stake in the Picnic operator in 2009, POD Concerts Ltd was heavily loss making, Mr Benn said. It was also “simply not true” for Mr Reynolds to claim the Picnic was all about Mr Reynolds as, from 2004, the Picnic was owned equally by Mr Reynolds, Jim Aiken and Mr Benn.
Mr Benn said Mr Reynolds had recently effectively decided to opt out from running the festival. It was also “insulting” for Mr Reynolds to claim the Picnic was going to be included with other gigs or the FRD group was pursuing the ‘Tesco principle’ of “one size fits all”. He accepted Mr Reynolds had not been properly included in relation to some offers made to bands.
He said the Picnic’s losses last year caused dissastisfaction on all sides and he believed Mr Reynolds was left unable to pay certain debts connected with it. Mr Reynolds had approached him a number of times about being bought out and he also understood Mr Reynolds was in talks with the UK Mama Group.
Mr Reynolds had indicated he believed the festival should not proceed this year while the other shareholders firmely believed it should. It was in that context he asked Mr Reynolds to meet him last February as he believed Mr Reynolds was formulating an exit strategy and had lost trust in FRD. He also rejected claims the Latitude festival is “a UK replica of Electric Picnic”.
