Entertainment WME Sues Founder of Country Festival Series It Purchased in 2018

05:28  05 august  2020
05:28  05 august  2020 Source:   billboard.com

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WME says an Oregon promoter is to blame for a popular festival brand’s collapse just months after the agency took over full ownership in 2018.

WME finalized its purchase of 100% of Anne Hankins’ Willamette Country Music Concerts in 2018, keeping Harkins as an employee to produce its three festivals in Oregon — the Willamette Country Music Festival in Linn County, the Country Crossings Music Festival in Central Point and the Cape Blanco Country Music Festival — as well as the Mountain Home Country Music Festival in Idaho.

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But after the Country Crossings festival experienced low turnout in 2018 due to extreme heat and a nearby wildfire, and the company’s main Willamette Country Music Festival experienced an unusually high number of alcohol-related incidents, local support for the festival dwindled and — coupled with financial losses — sunk the series’ future prospects. Hawkins was fired that fall.

Now, 19 months after firing Hankins, WME has filed a lawsuit alleging the founder misrepresented her business’ financial health in 2013 and misappropriated hundreds of thousands of dollars in funds after the sale, with millions more needing to be accounted for, according to a lawsuit filed July 31 in nearby Lane County, Oregon.

Hankins’ representative declined to comment for this story.

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Since 2010, Hankins had operated Willamette Country Music Concerts as a family run business employing her husband, three daughters and son-in-law. In 2013, WME purchased a controlling 51% interest before buying out the rest of the company five years later. But things started to unravel after the 2018 events’ flopped, worsened by reports that some vendors for the marquee Willamette Country Music Fest didn’t get paid, including Linn County Sheriff Jim Yon, who said his agency was owed more than $70,000 for providing security services.

After a brief investigation, Yon learned Hankins had been convicted in 2001 of lying on an application for a $350,000 loan and withdrew his support for allowing the event to return to Linn County in 2019. This led to the Linn County Board of Commissioners rejecting Willamette Country Music Fest’s 2019 festival permit application,” according to the lawsuit.

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Vendors at the Country Crossings festival also complained of not being paid, prompting WME to launch an investigation. In reviewing financial records, WME found “significant discrepancies between the real statements and the ones provided by Hankins,” attorney Matthew J. Kalmanson with Portland law firm Hartman Wagner wrote in a civil complaint that became public Monday.

Over the course of 24 pages, Kalmanson accuses Harkins of forgery, embezzlement and theft, but omits that two years after the internal investigation began Harkins has not faced any criminal charges related to her time running the festivals on behalf of WME.

The festival series’ collapse is an embarrassment for WME, which had booked its own artists to play, despite the obvious conflict of interest for its agency business.

WME also appears to have fallen short in its own due diligence, claiming in the lawsuit it was unaware of the 2001 conviction, despite a portion of the case making its way to the 9th Circuit Court of Appeals. In that case, Hankins agreed to settle her $350,000 debt with the bank for a $5,000 payment. The Oregon U.S. Attorney’s Office felt that Hankins had not been punished enough (despite serving a 30-day jail sentence) and won a $331,995 judgement against Hankins which was then applied to the national Crime Victims Fund. The fund has been criticized in recent months for misappropriations by Congress due to caps on victim compensation.

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How WME missed this entire saga is unclear, but the festival’s financial problems allegedly meant the agency was on the hook for the “payment of millions of dollars to the other victims of Hankins’s fraud, including the artists and vendors whom Hankins stiffed.”

WME is now suing Hankins for fraud, breach of fiduciary duty and contract and unjust enrichment, accusing her of “lying about her criminal background,” “doctoring financial and other records to induce … continued investment” and engaging in acts “that enriched her and her family at Plaintiffs’ and others’ expense.”

As of Monday, WME has not been able to successfully serve Hankins with the suit, according to court records.

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