Practically three years after Utopia Music purchased music financing platform Lyric Monetary, Lyric’s former house owners are nonetheless preventing for full cost from the embattled Swiss music firm.
The previous house owners of Lyric have requested a federal court docket in New York to uphold an arbitration ruling ordering Utopia – which just lately rebranded itself as Correct Music Group – to make the ultimate cost on its October, 2021, acquisition of Lyric Monetary.
In response to court docket paperwork, Utopia agreed to pay USD $8 million for Lyric Monetary, within the type of a $5 million upfront cost and two deferred funds of $1.5 million every.
Utopia nonetheless hasn’t made the ultimate $1.5 million cost, the sellers mentioned in a petition filed with the US District Court docket for the Southern District of New York, which will be learn in full right here.
Lyric Monetary offers advances to artists, songwriters, producers, report labels and music publishers, in alternate for future royalty earnings streams.
It was one among 15 acquisitions that Utopia made throughout a shopping for spree over the previous a number of years, which is believed to have led to the music firm’s ongoing monetary issues.
The corporate has hinted that its monetary points stem from the spike in rates of interest seen over the previous few years.
Utopia has applied a number of rounds of layoffs, which have resulted in staffing ranges falling from round 1,200 to some 250 full time equal positions, excluding contractors and workers at its UK bodily music distribution warehouse.
Regardless of the staffing cuts, the corporate seems to proceed to wrestle financially. This previous spring, it went to its shareholders asking for an emergency €6 million (approx. $6.4 million) money infusion.
In arbitration hearings held in London, Utopia Music argued that it hadn’t made the ultimate cost to Lyric’s former house owners as a result of they’d did not ship on a situation of the sale, which was the supply of ARTiE, a brand new device for Lyric Monetary prospects that permits customers to mix “dozens of on-line income sources that each one require separate logins into one easy dashboard for all income sources.”
Utopia mentioned that the ARTiE product delivered by Lyric Monetary didn’t dwell as much as the situations set out within the sale settlement, and Utopia needed to spend its personal cash to construct a substitute.
Lyric Monetary’s house owners – which embrace Tennessee-based Music World Leisure Company and EDE LLC, an organization owned by Richard Eli Ball, in addition to Claritas Personal Credit score Fund – argued that they’d delivered ARTiE as promised.
They mentioned that it was the second cost of $1.5 million cost that was conditional on ARTiE’s supply, and never the third and closing cost of $1.5 million. They argued that, since Utopia had made that second cost, the music firm had in impact accepted supply of ARTiE.
In its resolution, issued on June 17 of this 12 months, the London Court docket of Worldwide Arbitration (LCIA) largely sided with Lyric’s former house owners, noting that data confirmed Utopia’s executives had accepted supply of ARTiE on a Zoom name in Could 2022.
The arbitration panel additionally famous that Utopia had failed to explain in what methods ARTiE was poor.
It ordered Utopia to pay Lyric Monetary’s former house owners the $1.5 million, plus authorized prices, arbitration prices and curiosity from the time that the cost was initially due in April 2023. The arbitration panel’s ruling will be learn in full, right here.
In response to paperwork filed within the New York District Court docket, that quantities to greater than $1.86 million. The previous house owners of Lyric mentioned the cost had not been made as of the time they’d filed the paperwork on Wednesday (July 3).
The previous Lyric house owners’ petition asks the court docket to implement the sooner resolution by the arbitration court docket, and implies that the cash for the ultimate cost will be extracted from Lyric Monetary’s royalty revenues, which now circulate to Utopia Music.
“Utopia Music is accruing and due royalties, inter alia, from the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), Sony Music Publishing, and TuneCore,” the petition states.Music Enterprise Worldwide
