As reported by Variety, in the latest development of an ongoing dispute, singer-songwriter Barry Manilow, who had previously sold his music catalog to Hipgnosis Songs Fund in 2020, has teamed up with Nevada-based Stiletto Entertainment to file a lawsuit in the U.S. District Court in California, seeking $1.5 million in unpaid bonus funds. The lawsuit, obtained by Variety, alleges that the bonuses were owed as part of the acquisition of Manilow’s catalog in 2020 and asserts claims of breach of contract, fraud, fraudulent misrepresentation, and negligent misrepresentation.
This legal action comes on the heels of a similar lawsuit where Hipgnosis sued Manilow, also alleging breach of contract. A representative for Hipgnosis stated to Financial Times, "In discussion with Mr. Manilow’s representatives it became clear that there was a difference in understanding of certain clauses in the sale agreement regarding bonus payments."
The lawsuit goes on to detail the specifics of the purchase agreement, including an initial payment of $7,500,000 for the catalog, with additional payments contingent on the increase in Hipgnosis' income from the acquired assets over the following years. It claims that Manilow’s songs met the criteria for these additional payments, which were based on the income received by Hipgnosis during specific years.
In reference to Hipgnosis’ founder Merck Mercuriadis, who departed from the company in the wake of a stock downturn, the lawsuit states that Hipgnosis induced Manilow and Stiletto Entertainment to enter into the contract by making promises regarding album reissues, special compilations, and licensing agreements. However, the lawsuit alleges that these promises were not fulfilled, and that Hipgnosis lacked the necessary expertise and experience to maximize the value of the catalog.
Established in 2018, Hipgnosis made headlines by acquiring music assets from various artists, but the company faced challenges in delivering on its grand commitments. After a period of declining stock value and shareholder dissatisfaction, the company was acquired by Blackstone-owned Lyra Bidco Limited, and Mercuriadis resigned from his position in July.
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