The Courier can reveal organisers Tristan and Aaron Gray are almost $500,000 in debt, with bands and subcontractors chasing payment.

The pair promised the festival would offer big bands at a low ticket price. Jebediah, The Panics, Blue King Brown, Tim Rogers, Clare Bowditch and Bertie Blackman were some of the acts on the bill.

However, the festival failed to make enough money to cover costs. And bands, including Ballarat's Epicure and Matheson, have not been paid.

The brothers have since disappeared and have been unable to be contacted by agents and publicists.

Aaron's mobile phone has been disconnected and Tristan's phone is switched off, with a full message bank.

In an email to Chrissie Vincent Publicity and Management on October 2, Tristan said they would not be able to pay off their debts.

"Unfortunately, the festival lost nearly $500,000 and all attempts to recover money and find investors has failed," he wrote.

"This means that the company is preparing to go into liquidation and you will be contacted shortly.

"Feel free to seek legal advice as Aaron and I have no assets and there is nothing worth pursuing."

The Courier understands the majority of the bands playing at the festival had been booked by Melbourne-based Premier Artists.

The company declined to comment on the situation.

Brett Murrihy, The Panics manager and representative for Sydney's Harbour Agency, said the band was still hoping for a positive outcome.

"At this stage we're negotiating for the artist to be paid and will know more later in the week," he said.

A representative from Chrissie Vincent said she believed the Grays had failed to take advice from people in the industry after they were urged to cut the festival from three to two days and limit the number of bands on the bill to save money.