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.

August 19, 2005Philadelphia, PAThe Trocadero Lifetime, Vision, special guest TBA7pm, all ages, $20
August 19, 2005Philadelphia, PA First Unitarian Church Coalesce, Turmoil, Cursed, All Else Failed7:30pm, all ages, $12
August 19, 2005Sayreville, NJ Starland Ballroom Unearth, Chimaira, God Forbid, Madball, Six Feet Under, Nora, The Banner, If Hope Dies 5pm, $13
August 20, 2005Wilkes-Barre, PACafe Metropolis Coalesce, Fall Rivers, TBAMatinee
August 20, 2005Lawrence, KS Granada Coalesce, Nodes of Ranvier, Filthy Jim, Mesa Falls to Mophisto
August 20, 2005Bound Brook, NJHamilton St. Cafe Spitalfield, Gym Class Heroes, the Bank Robbers, GUNSLIKEGIRLS, Cameron1pm, $10
August 20, 2005Philadelphia, PAThe Trocadero Throwdown, Turmoil, Most Precious Blood, The Red Chord, Remembering Never, The Agony Scene, Scars Of Tomorrow, Gym Class Heroes, Necktie, The Warriors2pm, all ages, $13
August 20, 2005Taunton, MA The Web Cafe 100 Demons, Death Before Dishonor, Colin Of Arabia, Donnybrook, Dying For It, 40 Second Love Story5:30pm
August 20, 2005Philadelphia, PAFirst Unitarian Church 108, Champion, Good Clean Fun, Outbreak2:30pm, all ages, $12
August 20, 2005Philadelphia, PATrappe YMCA Good Clean Fun
August 20, 2005Philadelphia, PAStarlight Ballroom Lifetime, 108, special guests7:30pm, all ages, $20
August 21, 2005Philadelphia, PAThe Trocadero Rise Against, From Autumn To Ashes, Stretch Arm Strong, Norma Jean, Emery, Comeback Kid, Bedlight For Blue Eyes, Horse The Band, At All Cost, Look What I Did1:30pm, all ages, $15
August 21, 2005Amityville, NYVillage Pub SouthGood Clean Fun, AHOY, the Oblivious, Rematch, Those Left For Dead, Privilege2pm
August 21, 2005Asbury Park, NJ The Stone Pony Lifetime, The Bouncing Souls, The Loved Ones
August 21, 2005Hackettstown, NJ The Hackettstown Skate Park WhattheHellfest: Dead to Fall, Ed Gein, Ion Dissonance, This Is Hell, Nodes of Ranvier, Tony Danza Tap Dance Extravaganza,Life In Pictures, Embrace The End, The Concubine, Animosity, My Bitter End, Last Perfection, The Burning Season, Stray from the Path, Seventh Star, The Warriors, Rocking Back & Forth to Create the Illusion of Satisfaction, The Mayflower Blueprint, Fall From Apathy, Label the Traitor, The Messiah Complex, Set Your Goals, Hourglass Relapse, Revenance, more TBA CANCELLED
August 21, 2005Montclair, NJ Bloomfield Ave Cafe Ensign, Champion, Outbreak, Betrayed, This Is Hell, FC5noon, $10
August 21, 2005Montclair, NJ Bloomfield Ave Cafe Remembering Never, The Red Chord, Turmoil, Sinai Beach, Animosity6pm, $12
August 21, 2005Lemoyne, PA The Champion Ship Champion, Modern Life Is War, Betrayed, The Trade
August 21, 2005Randolph, NJObsessions Silverstein, Stretch Arm Strong, Evergreen Terrace, Haste The Day, Good Clean Fun, Scary Kids Scaring Kids, Still Remains, Roses Are Red, Kane Hodder5pm, $12