Legal action being taken against SFX Entertainment

SFX Entertainment is reportedly being sued by investors.

A class action lawsuit, where one or more people sue on behalf of a larger group, has been filed against the events company, with allegations that its largest shareholder, Robert F.X Sillerman, mislead third party investors that he had the financial backing to acquire it.

PR Newswire reports "defendants made materially false and misleading statements in connection with the proposed acquisition of SFX by Robert F.X. Sillerman, SFX's Chief Executive Officer, and largest shareholder, for all of the outstanding common stock he did not already own.

"The complaint alleges that throughout the class period [the time in which the alleged unlawful act occured], defendant Sillerman repeatedly affirmed his commitment to acquire SFX. However, defendant Sillerman knew or recklessly disregarded and failed to disclose that he did not have any financing in place at the time he made his proposal and knew or recklessly disregarded that he could not obtain the financing to consummate the transaction."

Abbey Spanier LLP, the team behind the lawsuit on behalf of the investors, also claims Sillerman "initiated and maintained a sham process designed to lure third party offers".

Festivals such as Tomorrowland, Electric Zoo and Mysteryland fall under the ownership of SFX Entertainment.

Read more here.

[ Via: Dancing Astronaut]