Legal options limited for unpaid vendors at NewBo Evolve

Published: Oct. 22, 2018 at 5:12 PM CDT
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Some vendors that never got paid from last summer's NewBo Evolve festival in Cedar Rapids are now wondering about taking legal action.

Newbo Evolve was a three-day festival of musical acts and speakers. Go Cedar Rapids lost $2.3 million.

That caused Go Cedar Rapids to not be able to pay off vendors before the organization shut down last week.

A few lawyers said it'll be difficult for business owners to recover their money from Go Cedar Rapids. That's mainly because the organization doesn't have any money, or any other assets, left.

The board members could be sued individually but that also has its challenges. Under Iowa law, board members are protected from legal claims as long as the person acted in good faith. So as long as the board member didn't do anything criminal or illegal, he or she should be protected. Each member of Go Cedar Rapids also carried director and officer liability insurance.

The Iowa Attorney General’s Office says they've received questions from vendors about what legal options are available. A spokesperson said if vendors believe a theft happened, they should report it to local law enforcement.

At last check Cedar Rapids Police have not received any complaints. But some business owners are still deciding.

"We are definitely looking into what we can do legally but I don't think there's a lot of hope. Once a business in my understanding out of business they have to pay their secure debtors, and we're considered an unsecured debtor,” owner of Dollup Beauty Nikki Hynek said.

Go Cedar Rapids was a nonprofit organization.

Board members previously said they received misinformation from former executive director Aaron McCreight about ticket sales and sponsorship. Members say that hid some of NewBo Evolve's financial struggles.