The Gathering 2014 – Not repeating the financial failure of the 2009

[MacMillan of Rathdown]

That should have never happened, and certainly should not happen again.

The public entity holding the rights to the event should insist (in a contract with the promoter/organizer) on a surety bond, or performance bond, that will cover at least a portion of subcontractors' costs in the event of financial default.

In the instance of the 2009 event the rights were held by a private company, in much the same way the rights to a concert in a park are held by the promoter, not the municipality that rents out the park.

In the motion picture and television industry it is possible to get what's called a completion guarantee bond, which assures the completion of the film/show if the producer exceeds the projected budget. When this happens the completion bond company becomes the owner of the film-- and when it is completed they recover their loss from the money generated by the marketing of the picture.

Unfortunately, it is virtually impossible to insure an event against loss for two reasons: (1) it can be weeks, or months, after the event before the true financial picture is known; (2) in the event of a loss, there is nothing the bond holder can attach to recoup his loss.

Such bonds, though they act more like a "loan" in actual practice, provide insurance against bankruptcy.

This raises the question of who repays the "loan"? Generally the "repayment" is achieved by the bond issuer selling off the assets of the company that has defaulted. Where there are no tangible assets it is virtually impossible to get a bond.

It surprises me that in the country (Great Britain) that invented modern insurance, this kind of protection isn't routine. Does anyone know why?

Probably because you can't insure against going broke.