Nearly three years after Utopia Music acquired music financing platform Lyric Financial, Lyric’s former owners are still fighting for full payment from the troubled Swiss music company.
Lyric’s former owners have asked a New York federal court to uphold an arbitration award against Utopia – which recently rebranded itself as appropriate music group – The final payment will be made in October 2021 when acquiring Lyric Financial.
According to court documents, Utopia agreed to pay $8 million For Lyric Financial, start with US$5 million Advance payment and two deferred payments $1.5 million Each.
The sellers said in a petition filed in the U.S. District Court for the Southern District of New York that Utopia still has not paid the final $1.5 million, which can be read in full here.
Lyric Financial provides upfront payments to artists, songwriters, producers, record labels and music publishers in exchange for a future stream of royalties.
It is one of 15 acquisitions Utopia has made during a buying spree over the past few years, which is believed to have contributed to the music company’s ongoing financial problems.
The company has suggested its financial problems stem from soaring interest rates over the past few years.
Utopia implemented multiple rounds of layoffs, resulting in staffing levels falling compared with the same period last year 1,200 to some people 250 Full-time equivalent positions, excluding contractors and staff at its UK physical music distribution warehouse.
Despite the layoffs, the company appears to be struggling financially. Last spring, it asked shareholders for emergency 6 million euros (about. $6.4 million) cash infusion.
At an arbitration hearing in London, Utopia Music argued that it failed to make final payments to Lyric’s former owners because they failed to deliver in accordance with the conditions of sale, namely art educationa new tool for Lyric Financial customers that allows users to combine “dozens of online revenue sources (all requiring separate logins) into a simple dashboard.”
Utopia said the ARTiE products delivered by Lyric Financial did not meet the conditions set out in the sales agreement and Utopia had to build replacements out of its own pocket.
Owners of Lyric Financial – which includes Tenn. music world entertainment inc. and ED LIMITED.a company owns Richard Eli Ballalso Clarity Private Credit Fund – argued that they had delivered ARTiE as promised.
They said this was the second $1.5 million payment conditional on delivery of ARTiE, not the third and final $1.5 million payment. They believe that now that Utopia has made the second payment, the music company has actually accepted ARTiE’s delivery.
In a ruling issued on June 17 of this year, the London Court of International Arbitration (LCIA) largely sided with Lyric’s former owners, noting that records showed Utopia executives had accepted delivery of ARTiE.
The arbitration panel also noted that Utopia failed to describe the ways in which ARTiE was defective.
It ordered Utopia to pay $1.5 million to the former owners of Lyric Financial, plus legal fees, arbitration costs and interest from April 2023, when the original payment was due.
According to documents filed in New York District Court, this amounts to more than US$1.86 million. Lyric’s former owner said the payment had not been made as of Wednesday (July 3) when the paperwork was filed.
The petition from Lyric’s former owners asks the court to enforce the arbitration court’s previous ruling and suggests that the final payment could be funded from Lyric Financial’s royalty revenue, which now goes to Utopia Music.
“Utopian music is accruing and deserves royalties, among other things, from American Society of Composers, Authors and Publishers (ASCAP), radio music corp. (BMI), Sony Music Publishingand Tuning” the petition stated.global music business
