Maverick/Warner Lawsuit – Reuters Article
LOS ANGELES (Reuters) – Madonna’s Maverick Recording Co. has aimed its legal guns at Warner Music with a breach of contract lawsuit seeking $200 million (110 million pounds) in damages and an end to the 12-year-old joint-venture between the two firms.
The lawsuit, filed in Los Angeles Superior Court on Thursday, is the culmination of a year-long dispute between Maverick and Warner, predating the recent $2.6-billion purchase of Warner Music by a group of investors led by Edgar Bronfman Jr.
The lawsuit also names Warner’s former owner, Time Warner Inc, as a defendant. Time Warner declined comment.
The suit, which alleges fraud and false accounting, caps a dispute centring on the future of the venture, home to acts like Michelle Branch and Alanis Morissette, after the expiration of the partnership deal at the end of 2004.
According to terms of the deal, Warner reportedly has the option to buy out the 60 percent of the label it does not own at the end of the year.
A person familiar with the matter said Madonna and her partners had tried to sell her 60-percent stake in the label to Warner Music and its former parent Time Warner.
But those talks broke down over price, with Madonna valuing her stake at about $60 million and Warner Music offering far less, the person said.
Representatives for the superstar, who releases her own records under a separate recording deal with Warner Music’s Warner Bros. Records, also approached Bronfman about a deal, the person said.
Madonna’s lawsuit comes one day after Warner Music filed a claim in a Delaware court asking a judge to rule it had met its commitments in its deal with Maverick and that any claims to the contrary were without merit.
“Warner Music Group is simply seeking to affirm that the claims Maverick Records has been making against the company over the past year regarding the joint venture are baseless, unsubstantiated and without merit. We look forward to resolving this issue so all parties can move forward with clarity,” a spokesman for Warner said.
“This effort to resolve ongoing contractual issues surrounding the Maverick Records joint venture agreement in no way impacts the company’s deep respect for Madonna,” the spokesman said.
Calling the lawsuit in Delaware a “sneak attack” Maverick’s attorney Bert Fields said he was doubtful the issues would be resolved out of court.
“We’ve been trying to get these people to settle for a year now and we don’t think we’ll have any success in the future,” said Fields, who is considered one of the top entertainment lawyers in Los Angeles.
Fields said Maverick was moving to proceed with the case in California and to have the Delaware action dismissed.
The legal battle comes as Warner Music undergoes a broad restructuring, resulting in the loss of an estimated 1,000 jobs, to compete more effectively in the music market, which has been severely impacted by online piracy, discounting and competition from other forms of entertainment like video games.
Article by Sue Zeidler