Creditors of failed festival The Grass is Greener shortchanged as restaurant loans go unpaid
Shattered suppliers of failed festival The Grass is Greener now know how little they’ll get back, with money used to prop up organisers’ struggling restaurants never to be repaid. Full details.
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Shattered suppliers of the failed Grass is Greener festival have been told they’ll get as little as three cents for every dollar owed, despite festival money being used to prop up struggling restaurants owned by the organisers.
The company behind the festival, Hand Picked Events and Marketing, went into administration on December 8.
Deal leaves festivals suppliers short, restaurant loans unpaid
Contractors, suppliers, and other creditors from Cairns to the Gold Coast – together owed as much as $3.9m – were told the festival handed out more than $760,000 in interest-free loans to restaurants linked to its director Oliver Fines-Frost, also known as Oli Frost, and co-founder Jonathan Eddings, originally from Cairns.
But the businesses which received the funds will never have to pay them back after creditors have now voted to sign a deed of company arrangement.
Under the agreement, Hand Picked Events and Marketing will not go into liquidation and will be allowed to continue to trade.
Mr Fines-Frost has 90 days to pay $200,000 into the administration account which, if paid, would still leave a multimillion-dollar shortfall for creditors.
The report revealed festival organisers were in discussions with administrators more than a month before its collapse.
“My biggest gripe is that (festival organisers) knew, weeks out, that it was never going to work,” one creditor, who voted against the arrangement, said.
“Now I’m flat broke, so how am I going to fund a case against them?”
Only a fraction of creditors voted
For a resolution to be passed at a creditor meeting, it must be voted in by at least half of the creditors, both by number of creditors and amount owed.
The administrators said “disputes over several creditors’ claims” meant the total amount owed by the company could be anywhere between $2.1m and $3.9m.
They recommended creditors vote in favour of the company arrangement, saying it would leave them better off than if the company was liquidated.
Of the 1035 known creditors, just 18 dialled in to the meeting.
Voting in favour of the arrangement were 12 creditors owed $2.09m, while six creditors owed a total of $319,700 voted against.
The Australian Taxation Office, which is owed more than $100,000, was among those who voted against the arrangement.
None of the 977 ticketholders to the cancelled festivals submitted proof of debt to the administration, and none dialled in to vote.
Tom Vandermeer of BCR Advisory said “all known creditors”, including ticket holders and ticket companies, were told about the meeting, “conducted in accordance with the Corporations Act”.
“It was a very disappointing creditor meeting – the whole matter has caused us so much pain and suffering,” said one local creditor who voted against the arrangement, and did not want to be named. “We just want to put it behind us.”
Big spending investor votes for arrangement
The largest creditor by amount is South Australia-based company DN Holdings, which loaned the festival $1.25m shortly before it went into administration.
DN Holdings is directed and held by David Nicholas, a 29-year-old social media influencer known as “The Captain Davo”, who found fame sharing his high-stakes gambling exploits with more than 600,000 followers.
His company was represented in the meetings by his consultant Jade Mulholland, whose family businesses have the same address as the festival’s head office at Burleigh Heads.
Mr Mulholland said creditors in the meeting who had voted against the deed of company had been “spiteful”.
“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,” he said.
“Some of the creditors on the call seemed to be voting no for some reason, to take it into liquidation.
“I think it was out of spite for some reason, because some of them did work with Oli and Johnny in the past, but in a liquidation we’d all get nothing, at all, zero cents.”
Mr Mulholland said he was hopeful a lawsuit under way in America to recover $1.3m in artist deposits would succeed and unlock more money for creditors.
“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,” he said.
“We voted for the best possible outcome.”
The administrators for Hand Picked said there was no certainty over the outcome of the case.
“Due to the nature of this recovery being dependant on a number of litigious factors, that have yet to be resolved, we are unable to make an accurate determination on the recoverable amount,” their report said.
“However, creditors should be aware that any successful recovery of money in relation to this itemwill be the same in a DOCA or liquidation scenario.”
The restaurant loans
Restaurants operated and/or owned by Mr Fines-Frost, including Maman and Naami at Burleigh, Luciana Tapas at Tugun and Milky Lane at Surfers Paradise, as well as an F45 gym in Lismore, were given more than $760,000 of the festival’s money.
All had experienced “poor trading” with most operating at a loss for FY22.
In a 93-page report, administrators John Morgan and Dane Skinner of BCR Advisory said they had written to each business demanding repayment in full, but none could afford to pay.
Mr Vandermeer said the loans were incurred before Hand Picked ran into financial trouble, but they impacted its bottom line nonetheless.
“Given that these loans now appear unrecoverable, this would have had an impact on the Company’s ability to meet its debts as and when they fall due,” he said.
Where it went wrong for TGIG
The report said the festival, which was founded in Cairns by Mr Frost and Mr Eddings, borrowed money from ticketing company Eventbrite to sustain it during the planning phase of the 2019 festivals. They are funds the administrator said were almost gone when it went into administration.
It turned a profit of $364,000 in 2019, but its fortunes changed in March 2020, when government restrictions on large events crippled the industry.
After restrictions were lifted in 2021, the company “invested heavily” in expanding Grass is Greener to Canberra and Geelong, borrowing more money – this time $2.5m from UK-based Festicket.
While ticketholders were told Festicket owed the festival money, the opposite was the case.
According to the administrator, organisers incurred more than $4.3m costs securing artists and venues, with more than half required upfront.
They then made $2m less than they expected in ticket sales and cancelled the two new shows outside of Queensland.
The company attempted to trade out of its financial difficulties and secured a loan for $1.25m from DN Holdings.
However, this amount was not sufficient to cover the ticket sales shortfall and the company began receiving statutory demands from its trade creditors.
The report said the cost to hire acts for the festivals quadrupled between 2020 and 2022.
Companies which received festival money, as set out in administrator’s report:
Investment Holdings Australia 88 Pty Ltd: The company which formerly operated Milky Lane Surfers Paradise before going into liquidation in December 2021. Directed by festival co-founder Jonathan Eddings and Oli Fines-Frost’s mother Karen Fines. The director’s report did not declare it owed the festival any money, however administrators found it owed $79,665. Loan is considered unrecoverable.
Lewis Invest Holdings Pty Ltd: Currently operates Milky Lane Surfers Paradise. Directed by Mr Eddings, who co-owns it with Mr Fines-Frost, whose home address is listed as its principal place of business. Mr Fines-Frost’s director’s report to administrators of The Grass is Greener said it owed the festival $79,655, but they found it owed $136,752. Loan is considered unrecoverable because of its “poor trading over the previous 18 months, trading at a loss for the entire 2022 financial year”.
Nam Bar Pty Ltd: Company behind takeaway restaurant Naami at Burleigh Heads, directed by Oli Fines-Frost and co-owned with Mr Eddings and another investor. Owes $78,624 to the festival. Loan is considered unrecoverable because the restaurant had “poor trading over the previous 18 months, trading at a loss for the entire 2022 financial year”, administrators found.
Tugun Beers Pty Ltd: Operates the Lucia Tapas Bar at Tugun, directed by Mr Frost, who co-owns it with Mr Eddings. Owes $411,733 to the festival, which is considered unrecoverable. Festival administrators found it had “poor trading over the previous 18 months, trading at a loss for the entire 2022 financial year” and that it was “still trading at a loss” so far in FY23.
Dynamite Holdings Pty Ltd: Operates an F45 gym in Lismore. Owes $53,000 to the festival company, which was not declared in Mr Frost’s report. Loan is considered unrecoverable as the gym has encountered “poor trading over the previous 18 months, maintaining a modest profit due to government grants in relation to the NSW floods”.
Directed and co-owned by Mr Frost and Moreton Bay resident Tenzin Stark, who performs as DJ Tenzin. Mr Eddings is also a shareholder.
MAMAN Bar and Kitchen Pty Ltd: Operates the restaurant of the same name in Burleigh Heads. It’s directed by Mr Frost’s mother Karen Fines. Shareholders include Mr Frost, Ms Fines and Ironman Matt Poole. Although Mr Frost’s report to administrators did not declare money owed to the festival by Maman, they found it owed $1437.
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