An image from a video promoting the Fyre Festival. YouTube/Fyre Festival CEO Billy McFarland told employees of Fyre Media on May 5 that they would no longer be paid for their work, according to a leaked audio recording obtained by Vice News.

He said the employees could stay at the company and work without pay if they wished.

This comes after the cofounders of Fyre Media, McFarland and rapper Ja Rule, tried to put on the doomed Fyre Festival that left would-be revelers in the Bahamas without adequate food, transportation, or shelter.

The recording was of a conference call among McFarland, Ja Rule, and other Fyre employees.

"After conferring with our counsel and all financial people, unfortunately we are not able to proceed with payroll immediately for the company," McFarland told his employees. "I understand that this is not an ideal situation for everybody."

McFarland also told employees he "understands" if this causes employees to resign. Most have since May 5, according to a source Vice spoke with.

"We're not asking anyone to stay employed," McFarland said. "There's no more official employment."

McFarland said he hoped to return focus to the Fyre booking platform and "building that business" and would be able to resume paying employees at some point in the future.

After employees raised objections that they would not be able to apply for employment benefits if they were not fired from the company, McFarland said he would let employees go on an individual basis if they asked him.

McFarland also confirmed to employees that no series A round had been closed, as Bloomberg reported that Comcast neared a deal that unraveled before the doomed festival.

"Should we have any concern about the FBI?" one employee asked.

McFarland demurred, saying it was an individual matter.

McFarland, Ja Rule, and Fyre Media have been named in at least seven lawsuits stemming from the Fyre Festival, with most claiming that the organizers defrauded festivalgoers by promising a luxury premium experience they knew they could not deliver.