A class action lawsuit has been filed against the directors and Robert F. X. Sillerman, the CEO, of SFX Entertainment.
Abbey Spanier LLP, a legal office specialising in class action suits, filed the suit on behalf of the company’s investors, PR Newswire reports.
The complaint alleges, among other things, that Sillerman made “materially false and misleading statements in connection with the proposed acquisition of SFX”.
Spanier claims that Sillerman “failed to disclose that he did not have any financing in place at the time he made his proposal”.
SFX Entertainment owns EDM festivals Tomorrowland, Electric Zoo and Mysteryland.
In August, rating agencies downgraded SFX after Sillerman failed in his attempt to take the company private again. SFX has $325 (£210) million in debt, mainly composed of senior bonds due in 2019.
Beatport temporarily froze payments to rights-holders prior to SFX, its parent company, attempting to return to a private company. Payments were made a week later and Sillerman apologised, writing in a statement that: "The way we handled this was inexcusable and should never have happened. The thousands of creators who have made Beatport what it is today deserved better, and I am deeply embarrassed, both personally and professionally, by what has happened."