Hulu, Netflix May Face Subpoena Over Fyre Documentaries

(Bloomberg) -- Two years after the Fyre Festival failed, it continues to make waves: Hulu LLC and Netflix Inc. may face subpoenas over their documentaries about the festival.

Gregory Messer, the Chapter 7 trustee for the Fyre Festival estate, sought the subpoenas in a filing Tuesday in bankruptcy court. He asked the judge to require Hulu and Netflix to show whether they paid for footage that should have been deemed an asset of the company.

“In order to create the documentaries, both Hulu and Netflix used unique behind-the-scenes footage of the festival,” Messer said in the filing. “Due to a lack of information, it is impossible for the Trustee to determine where the footage came from and whether such footage was an asset of the Debtor’s estate.” Reached by phone, Messer reiterated that he is seeking additional information on behalf of the estate.

Hulu and Netflix had no immediate comment.

The Fyre Festival, brainchild of Billy McFarland, was meant to be a two-weekend-long music festival in the Bahamas. It was scheduled to take place in the spring of 2017. The festival ended before it could begin: Musical acts canceled, promised luxury accommodations weren’t provided, and the five-star catering that was advertised was replaced with cheese sandwiches. McFarland pleaded guilty to financial fraud and is serving a six-year prison sentence.

Fyre Festival was widely mocked on social media, trending on Twitter for several days. Both Hulu and Netflix produced documentaries tracking the downfall of the event. The Netflix documentary was viewed by more than 20 million members, the company said Tuesday in a statement.

If the subpoenas are issued, the estate would be able to mine the information for any evidence that the Netflix and Hulu films used an asset such as video footage without compensating the estate.

“A Chapter 7 trustee is generally entitled to broad and deep discovery from any party that interacted with a debtor or its principals -- courts have said that it can legitimately be compared to a ‘fishing expedition,’” said Steven Wilamowsky, a bankruptcy and restructuring partner at Chapman & Cutler.

“If the claims were to survive a motion to dismiss, or the court were to grant broad discovery on the matter, these guys would probably pay to settle,” he said, referring to Hulu and Netflix.

©2019 Bloomberg L.P.

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