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Paradiso 2020 in Limbo as Insomniac Sues USC for Repayment of Millions

by Gavin McDermott

Insomniac Events is suing USC Events and its owner, Chad Anderson, alleging that USC misused funds provided by Insomniac for Paradiso Festival 2019. Insomniac is also seeking an injunction against USC from advertising Paradiso 2020, claiming USC no longer has the right to promote the festival. The lawsuit states that USC has “damaged the Paradiso Festival Brand and Insomniac’s business and reputation, and Insomniac no longer wishes, and is no longer contractually obligated, to produce Paradiso Festival with USC.” Insomniac Events and USC Events each own 50% of Paradiso festival, but according to the lawsuit, Insomniac terminated the contract last fall after USC was unable to account for money Insomniac had advanced to USC earlier in the year to pay for Paradiso 2019.

The lawsuit details advancements made to USC Events from Insomniac from February to May of 2019 totaling $2,062,760.46 to pay artists and vendors for Paradiso 2019. However, on June 14th, the first day of the festival, Chad Anderson surprised Insomniac with a request for $215,055 to cover outstanding costs. By the end of the two-day festival, Insomniac had paid over $600,000 in unexpected costs to cover outstanding invoices that were supposed to have been covered with the $2,062,760.46 advanced earlier in the year. Yet in the weeks following Paradiso, Insomniac learned that the funds requested during the festival were never used to pay those outstanding invoices, and were forced to pay another $638,650 to artists and vendors to settle those debts in order to protect the Paradiso brand and their reputation.

The lawsuit outlines months of post-festival efforts to find out what happened to the missing funds and repeated deflections from Chad Anderson. In July 2019 when Insomniac again asked Chad Anderson where the money went, the suit claims he “told Insomniac that the Advanced Funds for UTA artists had been ‘allocated to other departments.’ Mr. Anderson did not explain, and has never explained, what these ‘other departments’ were.”

Insomniac finally terminated their contract with USC Events on September 21st after being unable to get any answers on where the money had gone, though Chad Anderson and USC events continued to promise to provide accounting details. Chad Anderson then gave them a QuickBooks report on September 22nd to account for everything, however, the report omitted key details and “contained annotations suggesting the report was edited after it was pulled from USC’s accounting software.” According to the lawsuit, Chad Anderson continued to promise information on where the money went and to settle all accounts through January of 2020.

Perhaps the most interesting gem in that lawsuit is that Insomniac is looking to produce their own multi-day, multi-stage EDM festival to replace Paradiso festival. Up until now, Paradiso has had an exclusive contract with The Gorge Amphitheatre to prevent any other Electronic Dance Music festival from hosting a multi-day, multi-stage festival at the venue. It’s unclear whether Insomniac would continue to use the Paradiso name or start entirely from scratch. It’s also unclear whether they would be able to pull off such a festival in 2020 with so many pending legal issues, or if they are aiming for a 2021 date.

With less than five months to go, signs for Paradiso Festival returning in 2020 look grim. Reports of USC not paying employees, performers, and contractors have circulated for quite some time now, and with this new lawsuit, if USC is unable to produce their flagship Paradiso Festival this year, this may be the end of USC’s domination of the Northwest Electronic Dance Music scene.

*Featured Image Via Dannyesque*

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