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California music festival company files for Chapter 11

Some of our Escondido readers may remember BottleRock 2013, a music festival held at the Napa Expo in May of last year that spanned five days. Some of our readers may have even made the trip north to attend the event. Unfortunately, the event caused quite a bit of financial distress for the company that produced it, BR Festivals LLC. As a result, the company recently filed for Chapter 11 bankruptcy.

The company had planned to put on another such event this year, but the dire financial complications quickly put an end to that planning. The Chapter 11 filing, which occurred on February 5, listed assets of only $610,000 against liabilities of $4.5 million.

The good news is that there appears to be an interested party who will purchase the company's production rights to the BottleRock festival. The new company has indicated that it will still plan a BottleRock music festival for late spring-early summer this year.

There is almost always risk involved any time a company plans a major event as a part of a larger business strategy. Most times these types of events require the expenditure of a large portion of capital, with the company hoping that the initial investment pays off in the long run. When successful, these promotional events can have a hugely positive effect on a company's balance sheet. However, when the event becomes more of a financial burden than an asset, as appears to have been the case with BottleRock 2013, the company holding the event could find itself in a tight spot financially. When the financial burden is more than the company can bear, Chapter 11 may become an option.

Source: Napa Valley Register.com, "UPDATED: Producer of BottleRock 2013 files for bankruptcy," Jennifer Huffman, Feb. 6, 2014

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