Hellfest organizers have issued a detailed release elucidating reasons behind the recent cancellation as well as their future plans. According to the statement:

On Tuesday evening, August 16th 2005, a fax was sent from Eric Cuthbertson, the General Manager of Sovereign Bank Arena to the //radiotakeover office, the company hired by Hellfest to market the event. […] The letter stated that the Sovereign Bank Arena requested that the policy be $2 million of general liability coverage with Global Spectrum (owners of the facility) and the Mercer County Improvement Authority listed as named insured from an insurer rated A VIII by BEST's Manual or that the lease would be cancelled by Global Spectrum […] effective 7:00 AM the following morning. That gave Hellfest less then 12 non business hours to come up with another insurance policy. The insurance policy previously obtained by Hellfest for Hellfest '05 was an A- rated insurer at $1 million, which was the required coverage set forth by the original contract.

Be sure that a massive law suit is in the works against Sovereign Bank Arena, Global Spectrum and the Mercer County Improvement Authority,

Some more details have surfaced in this New York Times story:

Shawn Van Der Poel, president of radiotakeover, a company in Mount Holly, N.J., that was handling marketing and promotions for the festival, said he expected Paper Street Music, the Mount Holly company that runs Hellfest, to file for bankruptcy. […] While at least one talent broker has complained that a number of performers did not receive deposits promised by the promoters, Mr. Van Der Poel said bands had been paid about $72,000 in deposits, but an additional $20,000 could not be paid because the arena never gave the promoters money from advance ticket sales.

In the void created by the cancellation, a number of bands have announced shows in the vicinity of the festival Among the bands performing are Coalesce, Lifetime, 108, Rise Against, Turmoil, Unearth, Bouncing Souls and Good Clean Fun.