Breakout On The Prom was due to take place over three days in Kirkcaldy at the end of last month, but the plug was pulled at the eleventh hour amid low ticket sales.
Fans waiting on refunds have now been hit with the news that the company behind the event is set to be struck from Companies House.
Breakout Events Ltd was set up to stage the music festival - the first ever staged on the Prom in the Lang Toun - and it put together a line-up which featured big names such as Goodbye Mr McKenzie, The Skids, Big Country, Midge Ure, GUN, Sandi Thom, and the Red Hot Chilli Pipers.
It also aimed to showcase a number of local singer-songwriters.
The festival had hopes of bringing thousands of music fans into the town centre each day – 30,000 was the top line number for the three days – but concerns over poor ticket sales prompted it to cancel with one week to go.
On May 24 - five days before the event was due to start - an application was made to Companies House for a voluntary strike off from the register.
The first Gazette notice - the official journals of record.- to strike off was lodged on May 31.
But, on June 8, documents show that the dissolution process was suspended after an objection was lodged.
Ian Arnott, sole director or Breakout Events Limited, said the company had forked out more than it took in ticket sales.
He said: “Way more money than what was received in ticket sales was spent on non-refundable deposits with all bands and artists along with a few suppliers.”
He said it was deemed that the organisers “had no option to cancel the event and liquidate, owing to still large cancellation fees in some cases, and multiple other costs”
Breakout’s original plans envisaged two stages - the main one in The Basin and a second dance/acoustic stage further along the Esplanade.
The first indication of troubles came when headliners Wet Wet Wet were pulled from the line-up just a few weeks before they were due to perform.
With staging, fencing and all the infrastructure due to be delivered on site for a week of set-up work, the organisers pulled the plug.
In a statement, they said: “The current economic climate has led to a level of ticket sales that makes live events unviable.
“We would like to offer our sincere thanks to all the bands, partner agencies and suppliers who continued to give us their support right to the last minute.”
Mr Arnott added: "Had we gone ahead and tickets hadn’t picked up a lot of people would have been let down and we couldn’t do that."
He also thanked the team which had worked on the event for over 18 months.
Breakout was originally scheduled to go ahead late in 2021, but COVID outbreaks meant it was then pushed back to this summer.