$5M in debt, Montebello Rockfest files for insolvency protection

$5M in debt, Montebello Rockfest files for insolvency protection

Montebello Rockfest organizers say they're $5 million in debt and have filed for insolvency protection because they can't fully pay some of the workers at last weekend's festival, including artists and technicians.

Organizers filed for protection under the Bankruptcy and Insolvency Act Thursday. The news comes just one week after the festival received more than $500,000 from the Quebec government.

"There is a financial difficulty that, at this point, prevents them from paying everybody that was involved in this last edition," said Gilles Corriveau, a spokesperson for the festival.

The money is owed to around 100 different creditors, said Stéphane De Broux, a partner with KPMG, which is acting as the trustee.

A full list of those creditors should be available by the middle of next week.

Organizers made the decision hoping it would allow the festival to restructure its operations and ensure its survival.

The insolvency filing is only a temporary solution, De Broux said, and the real challenge will be finding a solution to Montebello Rockfest's financial difficulties.

The festival needs a new investor to cover the debts, he said, and provide financial sustainability going forward.

Festival received funding from Quebec government

The popular musical festival attracts about 200,000 concertgoers every year, according to its organizers.

Last week, Quebec's tourism minister announced $506,000 in financial support for this year's edition of the festival, provided through the province's financial aid program for festivals and other tourism-related events.

Event organizers said they'll direct all their efforts to restructure the festival, attract new investors and maintain good relationships with bands, according to a news release.

"The owners are determined to have it continue in the future. This is why they're taking this measure," Corriveau said.

"It is not a liquidation measure. It is a measure to stop everything, to stop the clock going and to analyze and find ways to hold another event next year — and not just next year, but the years to come."

Some of the performers may have been paid a certain percentage up front, he added, but not their complete wages.

Corriveau said a formal analysis will take place over the coming weeks and months to determine what exactly led to the festival's troubles.

"Definitely there have been mistakes or there have been situations — maybe not mistakes, but situations — that put the festival in this situation," he said.

A 25-year-old man died at the festival last week from a suspected drug overdose.

In 2017, a 60-year-old man from Ontario was also found dead at the festival, his body lying on the ground just off the main site.

In an interview with Radio-Canada last week, Rockfest founder Alex Martel said the festival had to renew itself to keep going.

The 13th edition of the festival was held June 14 to 16, 2018, in the small town of 900 people halfway between Ottawa and Montreal.

Clarification : An earlier version of this story reported that Montebello Rockfest had intended to file for bankruptcy protection, but organizers later clarified they have not yet decided to take that step.(Jun 22, 2018 8:40 AM)

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