High-powered music biz attorney Allen Grubman, the subject of a $ 90 million fraud and breach of fiduciary duty suit filed last month by singer Billy Joel, is expected to countersue later this week, possibly as early as today, according to a source close to the case.
“They’re not going to give in, no matter the expense financially or to their reputations,” declared the source, who spoke on condition of anonymity.
Apparently Grubman and partner Arthur Indursky, named in the suit Joel filed Sept. 23 (Daily Variety, Sept. 24), believe that the legal maneuver is designed as “payback” by such behind-the-scenes players as former CBS Records chieftain Walter Yetnikoff and attorney John Eastman.
Both men have had close relationships with Joel and are known to have disdainful regard for the power that Grubman wields in the industry. Grubman’s client list has included Madonna and Bruce Springsteen.
The lawsuit follows Joel’s $ 90 million fraud and breach of contract suit against his former manager, Frank Weber, filed in 1989.
At the center of Joel’s latest suit are charges that the Grubman lawfirm sided with Weber against the singer, knowing about Weber’s financial misdeeds as early as 1982 but not informing Joel. Various charges of misconduct and malpractice, as well as numerous conflicts of interest, are also alleged.
Time a factor
Grubman’s countersuit will call into question why it took Joel 3 1/2 years after their business relationship had ended to file those claims. “At the time of his dismissal (in 1989), never once did Billy Joel or any of his representatives say anything about being dissatisfied” with Grubman, per the source.
The source says that during his 7 1/2-year tenure as Joel’s attorney, Grubman secured for the singer a $ 20 million non-returnable advance from Sony and the highest royalty rate Sony had given a performer up to that time.
“He made Billy Joel in excess of $ 50-60 million, and (the law firm) took only $ 1.3 million in legal fees during those 7 1/2 years,” the source says. As for Joel’s claim that Grubman and Indursky admitted to the FBI that they had invested with Weber while simultaneously representing Joel, the source paints a picture of “half-truths.”
The source says, “Weber was considered by everyone from the mid-’80s to 1988 that, ‘If you want to make money, you give it to Frank Weber.’ ”
The source also claims that Grubman “never” simultaneously represented Joel and CBS, as the Joel suit claims, and dismisses the charges of a lawfirm coverup.