Advertising, Marketing & Promotions Alert >> Kendall Jenner Pays
Total Page：16
File Type：pdf, Size：1020Kb
JUNE 2020 ADVERTISING, MARKETING & PROMOTIONS >> ALERT KENDALL JENNER PAYS $90,000 TO SETTLE BANKRUPTCY CLAIM OVER FYRE FESTIVAL POST Influencers and celebrity endorsers have a duty to disclose their material connections with the brands they tout on social media. Failure to do so could result in an enforcement action by the Federal Trade Commission (FTC). See another recent example of these issues in a previous alert. Recent developments in the highly publicized bankruptcy of the ill-fated THE BOTTOM LINE Fyre Festival serve as a reminder Kendall Jenner agreed to pay $90,000 to settle claims in a bankruptcy proceeding that, in the worst case scenarios, arising out of her now-deleted Instagram post that promoted the ill-fated Fyre influencers and endorsers can also be Festival. This settlement is a potent reminder of the breadth of risks that influencers forced to return fees received for their and celebrities may face when failing to disclose the material connections between social media services. themselves and the brands they endorse on social media. THE FYRE FESTIVAL KENDALL JENNER’S POST However, Jenner’s post did not The now-infamous Fyre Festival, the disclose that Jenner was paid by Fyre brainchild of Billy McFarland and According to the complaint filed in LLC to promote the festival, such as rapper Ja Rule, was billed as a luxury the bankruptcy proceeding, Kendall by including #ad. music festival that would take place Jenner was paid at least $275,000 on a private Bahamas island during to make a single Instagram post the spring of 2017. Tickets were sold as part of the Fyre Festival’s social THE SETTLEMENT for up to $100,000, and promotional media strategy. Jenner was one of Gregory Messer, who serves as Fyre material for the Festival promised a several models and influencers who LLC’s Chapter 7 trustee, claimed star lineup of top artists, bands and posted about the then-upcoming Fyre that the payments to Jenner were talent. Festival on their personal social media fraudulent and avoidable under the handles to hype up the event, without Bankruptcy Code and New York However, when attendees arrived at disclosing the payments they received bankruptcy law, and therefore Jenner’s the event, they quickly realized that to make such posts. company, Kendall Jenner Inc., should the festival could not deliver on what be required to repay those amounts had been promised, because all of The complaint alleged that Jenner as part of the discharge of Fyre LLC’s the artists had pulled out, and the successfully promoted that the festival outstanding debts. event had to be cancelled, making would be populated with models and headlines around the world. In 2019, beautiful people and that fans would The trustee alleged that because a bankruptcy trustee brought several be missing out if they did not attend it. Kanye West was never scheduled to lawsuits attempting to recover funds In addition, Jenner’s post “announce[d] perform, Jenner’s post therefore was for Fyre Festival creditors who lost my G.O.O.D. Music Family as the first made as part of a wider scheme to money in the event. headliners” for the festival, implying defraud investors and dupe customers that her brother-in-law Kanye West by insinuating that the festival would was slated to perform at the event. >> continues on next page Attorney Advertising 3038 JUNE 2020 ADVERTISING, MARKETING & PROMOTIONS >> ALERT be more successful than it could ever liability that exists for corporate entities be in reality. when entering into paid relationships FOR MORE INFORMATION with partners, customers, suppliers Allison Fitzpatrick Accordingly, such amounts should and clients.In this case, Jenner was Partner not be retained by Jenner but instead forced to return the fee because the 212.468.4866 should be redistributed to the festival’s [email protected] fee was paid as part of an allegedly defrauded investors. fraudulent scheme by an unscrupulous Josh J. Gordon Associate As part of the settlement, Kendall business partner. 212.468.4834 Jenner agreed to pay $90,000 in [email protected] The trustee’s complaint against exchange for waiving any other claims Jenner also relied heavily on FTC Paavana L. Kumar against her company. Associate disclosure obligations to make its 212.468.4988 case. The trustee pointed to the lack [email protected] DISCLOSURE REQUIREMENTS of disclosure of the material financial or the D&G attorney with whom you The settlement should remind connection between Jenner and the have regular contact. celebrities and influencers that their festival to support its position that the liability is not limited to FTC action. social media campaign promoting the Individuals (and their loan-out festival generally was not above board Davis & Gilbert LLP companies) need to be mindful that and had the intention of misleading 212.468.4800 1740 Broadway, New York, NY 10019 they are not exempt from the legal customers. www.dglaw.com © 2020 Davis & Gilbert LLP.