Maverick/Warner Lawsuit – Associated Press Article
Madonna‘s Maverick Records label sued Warner Music Group and Time Warner Inc. for breach of contract Thursday, accusing the record company and its former parent of improper accounting and management that cost the singer and her partners millions of dollars.
The lawsuit, filed in Los Angeles Superior Court, is the latest chapter in a long-running dispute between Madonna and Warner over Beverly Hills-based Maverick, a joint venture launched in 1992 by the singer and the record company.
In the suit, Maverick accuses Warner Music and the other defendants of “engaging in acts of self-dealing and profit-taking, falsely accounting for receipts and expenses of the partnership … and secretly attempting to seize partnership opportunities for their own benefit.”
Maverick claims Warner violated the terms of their venture agreement by failing to pay for “guaranteed” services like radio promotion, marketing and sales meant to support Maverick artists.
The suit also contends Warner obscured profits by the label by using “artificial and improper accounting methodology to create the false impression of losses.”
Madonna’s Tadpole Records Inc. and companies owned by her label partners, Guy Oseary and Ronnie Dashev, are named as plaintiffs along with Maverick.
The lawsuit asks the court to declare that the three partners have the right to end the joint partnership agreement and do business with other companies. Madonna and her partners also seek unspecified compensatory and punitive damages, which attorney Bert Fields estimated at over $200 million.
“They feel that they have not been accounted to properly,” Fields said. “They want fair accounting and they want damages for their losses.”
In a prepared statement, Warner Music Group called Maverick’s claims “baseless, unsubstantiated and without merit.”
The suit came a day after Warner filed a sealed lawsuit in Delaware, asking the court to affirm that Maverick’s claims are baseless, according to the court documents filed Thursday in Los Angeles.
Warner also made a point to separate the dispute over Maverick from its business relationship with Madonna, which goes back to 1984.
“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 statement said.
A spokeswoman for Madonna said the singer had no comment.
A Time Warner spokeswoman said the company doesn’t comment on pending litigation.
Time Warner sold Warner Music Group in November to an investor group including Edgar Bronfman Jr., Thomas H. Lee Partners, Bain Capital and Providence Equity Partners.
Madonna and her partners own a combined 60 percent stake in Maverick, whose artist roster includes Alanis Morissette and Michelle Branch. Warner owns the remaining 40 percent.
The current contract between Maverick and Warner is set to expire at the end of this year, and both sides have been trying to negotiate a settlement to the dispute for months.
At different times, Madonna and her partners have offered to buy back Warner’s share or sell their share to Warner. But the parties involved have not been able to agree on the record label’s value, Fields said.
Maverick asserts in the lawsuit that the label has generated more than $900 million in sales and profits of more than $100 million for Warner Music Group since Maverick was formed.
Source: Associated Press