Toni Braxton’s bankruptcy case has taken on an adversarial dimension with the filing of a complaint in which she alleges misappropriation of funds by her record company, Arista Records, and conflicts of interest by her former attorney Joel Katz, former business manager Bert Padell, and former personal managers Arnold Stiefel and Randy Phillips.
The complaint, filed last week in U.S. Bankruptcy Court for the Central District of California, seeks a declaratory judgment terminating Braxton’s contract with Arista and its affiliate Atlanta-based LaFace Records, which is co-owned by Antonio (L.A.) Reid and Kenneth (Babyface) Edmonds. Named as defendants of the complaint are Arista and LaFace; the others, though mentioned, are not parties to the lawsuit.
In January, Braxton filed for Chapter 7 bankruptcy protection after discovering she was nearly $3 million in debt.
Complaint seeks termination of the Arista pact on the grounds that California law bars enforcement of personal-services contracts beyond a seven-year period, and claims that the record company’s actions prevent it from enforcing the contract.
Stating that the case is about how a record company betrayed a young singer, the complaint alleges that Arista made gross profits of $180 million from the sale of 20 million copies of Braxton’s solo LPs, while Braxton herself is in financial distress.
It alleges that when Braxton renegotiated her contract in 1994 after her first hit “Toni Braxton,” Reid urged her to change lawyers and convinced her to hire Joel Katz, a prominent Atlanta-based music lawyer.
But, the filing claims Reid knew Katz had a conflict because he represented Reid and others at LaFace and Arista. Katz also recommended Stiefel and Phillips, who are “allied with the record company,” according to the complaint.
Reid also “made sure” Braxton would hire Padell, saying “he would be great” for her, despite the fact the company “knew Padell would not represent Braxton vigorously because he did not want to jeopardize his relationship with the record company.”
Among examples of improper representation alleged are that Katz did not negotiate the best possible contract for Braxton; her lawyers and managers never conducted an audit of the company’s record, did not monitor costs and expenses charged by the company and capitulated to demands for concert tours that were structured to be economically disastrous to Braxton.
The complaint also alleges the record company misappropriated funds, didn’t pay royalties and wasted Braxton’s money with profligate spending.
The singer is a five-time Grammy-winner with such hit singles as “Breathe Again” and “You’re Makin’ Me High.”
Calls seeking comment from Arista were not returned.