A US federal court has upheld an arbitration panel’s ruling that financially troubled music company Utopia Music must pay nearly $1.9 million to the former owners of Lyric Financial.
Switzerland-based Utopia acquired Lyric Financial in October 2021 as part of a multi-year acquisition spree.
According to court documents, Utopia Music — which recently changed its name to appropriate music group – Agree to pay $8 million For Li Yuanheng Financial Company, US$5 million Upfront payment, plus two deferred payments $1.5 million Do it later.
Lyric Financial’s former owners went to court in September 2023, saying they never received Utopia’s final $1.5 million payment. The case was sent to an arbitration tribunal in London, which ruled in favor of Lyric Financial’s former owners in June.
The arbitrator ordered Utopia to pay the entire amount owed, plus interest and costs, $1.863 million.
On Friday (July 19), the U.S. District Court for the Southern District of New York upheld the decision in a civil judgment, ordering Utopia to pay the full amount owed, plus additional interest payments due to Utopia from the date the petition was filed with the court. Final payment. The full order can be read here.
Lyric’s previous owners include Tennessee; music world entertainment inc. and ED LIMITED.a company owns Richard Eli Balland Clarity Private Credit Fundwait.
Lyric Financial provides upfront payments to artists, songwriters, producers, record labels and music publishers in exchange for a future stream of royalties. It’s one of more than a dozen acquisitions Utopia has made as the company continues to expand in an apparent bid to establish itself in many aspects of the music industry, including distribution, financing, data and royalty management.
These broad plans are starting to go awry as the company faces growing financial pressure, which Utopia suggests is due to soaring interest rates in recent 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.
The company also sold some of its acquisitions, including a music publishing platform Centricselling it to France-based believe Spring 2023, and Absolute labeling serviceUtopia will sell it to the original management team in the summer of 2023.
Despite a significant reduction in the scale of its operations, Utopia (now officially Proper Music Group) continued to face financial problems. The company issued an emergency plea to shareholders earlier this year 6 million euros (about. $6.4 million) cash infusion.
At the London arbitration hearing, Utopia argued that it failed to make its final payment to Lyric Financial because Lyric did not provide a new tool, ARTiE, which would have enabled Lyric customers to consolidate multiple income streams into a single account.
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.
The arbitrator rejected this argument, accepting the claim of Lyric’s former owner that the second payment, but not the third and final payment, was contingent on the delivery of ARTiE and that Utopia had in fact accepted it through the second payment delivery of the product.global music business
