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OPINION COLUMN: TED KRUCKEL

When Clients Don't Pay

Illustration by Joey Bouchard

In 2008 I attended the inaugural party for ArtHamptons in Bridgehampton on the grounds of the colonial masterpiece that is the Bridgehampton Historical Society.

This was a huge art happening, far grander than I expected, with all the big names on hand. There was an opening night party for the American Cancer Society and a weekend-long V.I.P. room which had a real sceney vibe, plus ample libations and eats. The sense was that ArtHamptons had been established as a permanent hitching post on the Hamptons social scene.

The bar and catering were ably handled by Mark Fahrer. But apparently ArtHamptons founder Rick Friedman woke up on Monday with buyer’s remorse and refused to pay. Word got around. The gossip buzzards hadn’t had such an event-business carrion feast since Lizzie Grubman pulled her impossible-to-beat white trash reverse move.

Throughout the weekend, according to Mr. Fahrer, Mr. Friedman had repeatedly promised to “make whole” the caterer, due to larger-than-expected crowds and less-than-hoped-for security for the V.I.P. section.

“I personally was out $9,000, but counting all my vendors, the number was more like 40,” Fahrer told me via phone recently.

When it became clear that Friedman had no intention of coughing up, Fahrer activated the “nuclear option.” He called Page Six, who gleefully reported the whole thing.

In the item, Friedman initially stated, “This caterer was compensated everything that was agreed to.” But interestingly enough, once Friedman realized the dust-up would be in the most powerful gossip column in the world, he relented, and Fahrer let the newspaper know that he had just been promised the balance.

But when payday finally came two months later, Friedman again balked, offering only a $5,000 kill fee instead of the agreed-to $9,000, and the other vendors were left to fend for themselves. Fahrer still sounds mad as a hornet.

No-pay clients come in many sizes and shapes. Some send in a partial payment with a note about elements they were disappointed by. Others get all blustery, threatening to sue or ruin a vendor’s reputation—the “you’ll never eat lunch in this town again” approach. Some brazenly just ignore the tab, certain no one will come knocking.

Event creator Bronson van Wyck told me about a party—not one he handled—that a lovely woman he knew was running for a wealthy Middle Eastern government. (There are so many, just pick one.) Anyway, they planned a huge event on the Seagram’s Plaza and had apparently left a big tab.

I called her. A lovely gal who wouldn’t let me use her name, told me the basic ins and outs. She said the government was pushing one of those giant luxury developments that they have over there—instant islands shaped like dollar signs with heliport patios, that kind of thing.

The total budget of the event was thought to be $4.5 million, much of it profit, the organizers expected. The planning started with a $1.5-million wire deposit. These governments are rich, of course; no credit check was required.

It turns out the entire real estate project had been cancelled before the event took place, but the royal hosts were too embarrassed to cancel the event after the invitations went out. So they went forward anyway, not telling the organizers that they had no intention of paying. And since the client was one of the wealthy Middle Eastern countries, there was no “advisable” strategy to collect. The event firm folded as a result. Oh well.

So here’s the dirty secret: While these types of shenanigans go on all the time, being a whistle-blower has risks all its own, in this case too horrible to consider.

I asked lighting guru Bentley Meeker what happens when he has a client who doesn’t want to pay the full amount: “If we do our job correctly up front, then the clients know what they are paying for and why.”

But certainly, Bentley, you must, once in a while, come up with a problem? “Most of the time we just eat it. Once we had a client stiff us for $20,000; it was a lot, but it was a planner we work with, so we just let it go,” he said.

J.B. Miller, the C.E.O. of Empire Entertainment, specializes in big-time entertainment productions. He has staged events with Bruce Springsteen, Jay-Z, and Christina Aguilera to name just a few. His answer to this problem is ironclad: “We are not partners in these events. We are hired to provide a service. Our payment policies reflect that.”

That means he expects clients to pay 100 percent of the costs up front. Does everybody go along with that? “There is a reasonable request that a client may want to withhold at least some portion of payment, as leverage that we will perform to the best of our abilities. We understand that, while we like to think that our repeat customers know it isn’t necessary. But if that is the case, we make it clear that the talent and all the out-of-pocket expenses be paid up front, and if they want to hold onto a portion of our fee, then we negotiate that on a need basis.”

Getting stiffed sucks, and it happens all the time, and there’s not much you can really do. Often suing costs more than the amount owed.

As I was writing this column I got all sorts of tantalizing leads—this Russian princess didn’t pay for her wedding, that record label refused to pay for a dinner because there was no lobster. Then there was that famous comedian, a beloved television father figure, and his family, who guaranteed 250 seats at Cipriani 42nd Street, then wanted to pay only for the 175 who showed. Actually, that one happened to me.

I wish I could end with a witty tale about how I shamed the celebrity into paying his bill, but that’s not what happened. I keep thinking I’ll run into him though.