WEST SACRAMENTO -- The co-founders of TBD Fest are being sued for an alleged breach of contract after an investor said they failed to pay $100,000 plus 10 percent interest.
The music festival brought thousands of people to the West Sacramento waterfront in 2014 and 2015, but the attorney representing TBD Fest said it lost money in its first year.
"Correct. The festival lost money, that being said the owners have been working very hard to get everybody paid. They've managed to get most of the issue behind them but there's still a few promissory notes out there that haven't been paid," attorney Mark Gallagher said.
Gallagher told FOX40 his clients, TBD Fest co-founders Clay Nutting and Michael Hargis, who also run LowBrau restaurant in midtown, are working on a settlement with DeWolf Emery, the investor who filed the lawsuit.
The attorney representing DeWolf Emery declined to comment on the case.
FOX40 spoke with another business owner who said the TBD Fest co-founders still owe him for designing their entire branding campaign during 2015.
"There were red flags initially. The first few checks they wrote me bounced," Jason Malmberg said.
Malmberg, doing business as Decabet said the co-founders owed him $5,000 for designing the main logo, signage and website for 2015's TBD Fest. He said whenever he contacted them requesting payment, they told him they were working on it but still asked for more designs.
Malmberg said when he took his story to social media, many other vendors and people who volunteered at the event said they had similar experiences.
"We weren't working for Habitat for Humanity, this was … we all came off the weekend with an afterglow like the city had done something amazing and we had, but it had been done on the backs of all these people who had done it for free," Malmberg said.
Gallagher said TBD Fest co-founders planned on paying everyone back what they were owed, including negotiating a payment solution with the DeWolf Emery.
"We've submitted an offer, they've submitted a counter proposal, I think we're trying to work on reaching a solution," Gallagher said.