For those following the fallout from the Fyre Festival, the drama continues. Last week, model and influencer Kendall Jenner settled a bankruptcy lawsuit for $90,000 relating to her promotion of the Festival.
To refresh your memory, Fyre Festival was planned for spring 2017, advertised as a music and culinary paradise held on a private island in the Bahamas. However, the Festival faced a growing number of logistical and financial hurdles leading up to the start dates, including cancelled talent bookings and incomplete accommodations. Organizers marketed the Festival as an extremely exclusive event and paid top dollar to some of the world’s most followed social media influencers to promote the Festival, including Jenner, Bella Hadid, and Emily Ratajkowski. Ticketholders were charged thousands of dollars to attend the Festival, but arrived to FEMA-like tents and prepackaged sandwiches. In 2018, the Festival’s organizer and CEO of its parent company, Billy McFarland, was sentenced to six years in prison after pleading guilty to charges of wire fraud and bank fraud.
Gregory Messer, the bankruptcy trustee overseeing the liquidation of Fyre Festival LLC, initially sought $275,000 from Jenner for her involvement in the Festival. According to the Netflix documentary detailing the Festival, Jenner was paid no less than $250,000 to promote the Festival on Instagram and direct consumers to the Festival’s website.
While it is not often that an influencer has to return his or her fee (especially when they satisfy their obligations), bankruptcy law provides trustees with a right to claw back payments made by the company before the company files for bankruptcy. Jenner’s fee was only part of the $5.3 million paid by Fyre Festival organizers to the world’s top modeling agencies and vendors to hold and promote the Festival – nearly $1.5 million of which was paid to two modeling agencies.
Takeaway: Influencers should remember that they are not shielded from liability with respect to acts and practices of the brands in which they endorse. Careful consideration should be paid to what it is the influencer is promoting and the potential risk involved – and, in some cases, whether the whole event sounds too good to be true.