Barry Manilow Sues Hipgnosis, Seeking $1.5 Million in Allegedly Unpaid Funds

Jem Aswad
3 min read
0

In the latest move in an ongoing dispute, singer-songwriter Barry Manilow, who sold a catalog of his music to Hipgnosis Songs Fund in 2020, and Nevada-based Stiletto Entertainment have filed a lawsuit seeking $1.5 million in unpaid bonus funds in U.S. District Court in California. The lawsuit, obtained by Variety, claims that the bonuses were due as part of the acquisition on Manilow’s catalog in 2020; it also alleges breach of contract, fraud and fraudulent misrepresentation, and negligent misrepresentation.

Hipgnosis had sued Manilow under similar terms late last month, also alleging breach of contract. In a statement to Financial Times, a rep for the company said “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.”

More from Variety

The lawsuit — which, in a comic note, identifies the plaintiff as “Barry Manilow writes the songs that make the whole world sing” — details an initial purchase price payment of $7,500,000 for the catalog, with “an additional purchase price payment of $750,000.00 if the cash income received by Hipgnosis from Hipgnosis’ Share of the Assets [i.e., income based on the Subject Masters] increased by at least ten (10%) percent year-on-year compounding for each of Years 1 through 3 from purchase,” and “an additional purchase price payment of $750,000.00 if the cash income received by Hipgnosis from Hipgnosis’ Share of the Assets increased by at least ten (10%) percent year-on-year compounding for each of Years 1 through 4 from purchase.”

It claims Manilow’s songs “satisfied the necessary conditions to receive the two additional $750,000 purchase price payments based on the income received” by Hipgnosis during those years, which it lists as ranging from $404,388 to $550,383 during each of those years.

Referencing Hipgnosis’ founder Merck Mercuriadis, who stepped down from the company earlier this year after its stock plunged, the lawsuit states: “Via its agent Merck Mercuradis, Hipgnosis induced Plaintiffs to enter into the contract by promising that its Chief Catalogue Officer and its various other purportedly experienced music industry employees and officers would pursue and achieve album reissues, special compilations, and licensing agreements in commercials, films, television and other media. It pledged to do so by leveraging its purported expertise, experience, and bench strength through its large staff. Hipgnosis promised to provide a full-time, dedicated team of qualified industry professionals to devote themselves to optimizing the value of the royalties they purchased.”

But, it continues, “Plaintiffs and Defendant entered into the MCAA on or about March 20, 2020, having to ultimately backdate it as, in a sign of things to come, Mercuradis lacked the corporate authority he represented he possessed, causing the deal execution to stagnate and delay… None of the promised marketing or promotion ever materialized. It has never consulted with Manilow or even attempted to so consult. It became clear that Hipgnosis made profoundly false promises. It lacked the skill, experience, and expertise to optimize the Manilow hits in play under the contract.”

Launched in 2018, Hipgnosis almost single-handedly led a gold rush on song catalogs by paying top dollar for more than $2 billion for a variety of music assets from artists ranging from Neil Young and the Red Hot Chili Peppers to Shakira and a large number of producer-songwriters. However, the company’s pledges far outpaced its ability to execute on them, and after months of plunging stock value and a shareholder revolt, the company was acquired by Blackstone-owned Lyra Bidco Limited and Mercuriadis stepped down from his post in July.

Best of Variety

Sign up for Variety's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

Advertisement