Insomniac Holdings LLC, a company behind festivals like EDC and Beyond Wonderland, has long been partnering with USC Events to throw Paradiso, a popular EDM festival held annually in southern Washington since 2012. However, according to a recently filed lawsuit in the United States District Court of Western Washington, this partnership has come to a contentious end.
The lawsuit lists both USC and Chad Anderson, USC Events’ CEO, as defendants. The dispute centers around what Insomniac refers to as “fraudulent activity of misusing funds taken from Insomniac.” The alleged misdealings occurred leading up to and following the 2019 Paradiso festival.
According to Insomniac, USC was under contract to render payments to Insomniac within 30 days of the festival’s end. USC and Insomniac were under contract to split all net revenue and losses from the festival.
USC had permission to borrow funds against future revenue in order to pay artists and vendors. However, it appears that USC did not use such funds to make these payments. In fact, Insomniac currently claims to have no knowledge of how this money ($2 million total) was used. Insomniac learned of the issue as artists and vendors began to inquire about not receiving payment for their services.
The lawsuit states that Insomniac advanced over $2 million to USC to arrange such payments. As a result of these funds not going toward their legitimate purpose, Insomniac paid an additional $1.2 million to settle up with artists and vendors.
Insomniac made numerous attempts to notify USC of their failure to meet their contractual obligations. Despite these attempts, Insomniac states that USC did not remedy the situation and was given notice of impending litigation.
Now, Insomniac is seeking to take decisive action. They wish to remove USC’s claims to Paradiso altogether. They to eliminate USC Events’ right to promote, associate with, or benefit from at all from Paradiso in the future. Moreover, they are demanding that USC account for their use of the borrowed funds, as well as pay damages. Such damages would cover what Insomniac claims to be severe harm to their brand and Paradiso’s reputation.