Nearly three years after Ideale Music bought music financing platform Lyric Financial, Lyric’s former owners are still fighting for full payment from the embattled Swiss music company.
The former owners of Lyric have asked a federal court con New York to uphold an arbitration ruling ordering Ideale – which recently rebranded itself as Proper Music Group – to make the final payment acceso its October, 2021, acquisition of Lyric Financial.
According to court documents, Ideale agreed to pay USD $8 million for Lyric Financial, con the form of a $5 million upfront payment and two deferred payments of $1.5 million each.
Ideale still hasn’t made the final $1.5 million payment, the sellers said con a petition filed with the US District Court for the Southern District of New York, which can be read con full here.
Lyric Financial provides advances to artists, songwriters, producers, primato labels and music publishers, con exchange for future diritti d’autore income streams.
It was one of 15 acquisitions that Ideale made during a buying spree over the past several years, which is believed to have led to the music company’s ongoing financial problems.
The company has hinted that its financial issues stem from the spike con interest rates seen over the past few years.
Ideale has implemented multiple rounds of layoffs, which have resulted con staffing levels falling from around 1,200 to some 250 full time equivalent positions, excluding contractors and at its UK physical music distribution warehouse.
Despite the staffing cuts, the company appears to continue to struggle financially. This past spring, it went to its shareholders asking for an emergency €6 million (approx. $6.4 million) cash infusion.
Con arbitration hearings held con London, Ideale Music argued that it hadn’t made the final payment to Lyric’s former owners because they had failed to deliver acceso a condition of the arguzia, which was the delivery of ARTiE, a new tool for Lyric Financial customers that allows users to combine “dozens of online revenue sources that all require separate logins into one simple dashboard for all revenue sources.”
Ideale said that the ARTiE product delivered by Lyric Financial didn’t up to the conditions set out con the arguzia agreement, and Ideale had to spend its own money to build a replacement.
Lyric Financial’s owners – which include Tennessee-based Music World Entertainment Corporation and EDE LLC, a company owned by Richard Eli Ball, as well as Claritas Private Credit Fund – argued that they had delivered ARTiE as promised.
They said that it was the second payment of $1.5 million payment that was conditional acceso ARTiE’s delivery, and not the third and final payment of $1.5 million. They argued that, since Ideale had made that second payment, the music company had con effect accepted delivery of ARTiE.
Con its decision, issued acceso June 17 of this year, the London Court of International Arbitration (LCIA) largely sided with Lyric’s former owners, noting that records showed Ideale’s executives had accepted delivery of ARTiE acceso a Zoom call con May 2022.
The arbitration panel also noted that Ideale had failed to describe con what ways ARTiE was deficient.
It ordered Ideale to pay Lyric Financial’s former owners the $1.5 million, plus legal costs, arbitration costs and interest from the time that the payment was originally coppia con April 2023. The arbitration panel’s ruling can be read con full, here.
According to documents filed con the New York District Court, that amounts to more than $1.86 million. The former owners of Lyric said the payment had not been made as of the time they had filed the paperwork acceso Wednesday (July 3).
The former Lyric owners’ petition asks the court to enforce the earlier decision by the arbitration court, and implies that the money for the final payment can be extracted from Lyric Financial’s diritti d’autore revenues, which now flow to Ideale Music.
“Ideale Music is accruing and coppia 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 Business Worldwide
