MUSKEGON, MI – An Oceana County judge decided against Electric Forest organizers in a hearing in the 27th Circuit Court on Feb. 24.

Judge Terrence R. Thomas denied a motion for intervention filed by AEG Live, a national concert promotion company which acquired Electric Forest co-organizer Madison House Presents in January. AEG had filed the motion on Feb. 6, along with a motion for a temporary restraining order and preliminary injunction.

The motion to intervene would have allowed AEG to take part as a plaintiff in the case. If Thomas had granted the motion, AEG could have then asked him to prevent the Double JJ Resort's current owners, Antler Bar Amusements LLC and Double JJ PropCo LLC, and its previous owner Progressive Resorts LLC, from refusing to honor a 20-year festival lease Progressive signed with Madison House in 2010.

The issue in contention is the status of the lease. ABA and Progressive claim that they no longer need to honor it, after the Double JJ was sold via a court order in November. The sale frees those parties from liens or claims by third parties, they asserted, including the lease by AEG. However, AEG asserted that the contract is part of the collateral so ABA must honor the lease.

If Progressive redeems the property, it must also honor the lease, AEG contended. ABA purchased Progressive's assets in November after it had been given receivership in regard to operations and provided advances to keep the resort running. According to the court order that gave ABA ownership of the property, Progressive would reacquire the resort if it paid the $7.6 million it owes ABA plus any additional advances at an 11 percent interest by 5 p.m. on May 19, 2014.

At the hearing, AEG's lawyer argued that the lease is part of the collateral and so must be honored. AEG and Madison House were not made aware that the sale would place their 20-year agreement in jeopardy until late January. He also explained that festival preparations were already underway. Bands had been booked, infrastructure investments had been made and over 25,000 tickets had been sold, he told Thomas.

Lawyers for ABA and Progressive asserted that the sale freed it from liens or claims by third parties, including Madison House and AEG. Furthermore, they said, AEG and Madison were given notice of the resort's sale and should have intervened last fall.

They also argued against the intervention because it would open the door to further litigation by other third parties, they claimed.

After hearing their arguments, Thomas denied the motion and the lawyers, along with Madison House Co-Partner Jeremy Stein, conversed in a separate room.

After the hearing, Stein said the hearing was "one step in a process" and that he was looking forward to a "good outcome."

"There's a lot of entities involved here right now so I think everyone's trying to figure what's best for everybody," he said.

He said the proceeds would not affect this year's Electric Forest Festival.

"We're excited to be plowing forward and I think everyone's intentions are for the festival not only to happen to be the best one yet," Stein said.

About half a dozen locals also showed up to the hearing, interested to learn more about the case and to see what would transpire. After court was dismissed few said they understood what had happened or what would come next.

"I don't know what's going on yet, darn it. It's just disconcerting," said Wally Wojack, who lives on the property and is known as the resort's historian. Wojack said he has worked for all five of the resort's owners, he said, and even helped plant the trees that make up Sherwood Forest.

He said he wants to see the festival continue.

"I think it would hurt the community. It's a money-maker for this county," Wojack said. "It would be a travesty if they cancelled it now, not considering the expenses it cost AEG."

Lisha Arino covers arts and entertainment, as well as other topics, as needed, for MLive/Muskegon Chronicle. Email her at larino@mlive.com or follow her on Facebook, Twitter or Google+.