The Pullman Group and EMI have hammered out a deal under which the Pullman Group would purchase all of Ronald Isley’s assets out of bankruptcy, including his portion of the Isley Brothers’ classic R&B music catalog, which includes such hits as “Shout” and “It’s Your Thing.”
But U.S. Bankruptcy Judge Kathleen March refused to sign off on the deal Tuesday, noting objections to the agreement from several parties, including singer Michael Bolton, who may be planning a competing bid for Isley’s assets.
March ordered the parties back to court next month.
In addition to Bolton, the proposed arrangement faces opposition from Marvin Isley and Christopher Jasper, both onetime members of the singing group, who oppose the sale, claiming that it will result in the sale of assets in which they have a copyright interest.
Bolton put in an initial bid of $25,000 to buy Ronald Isley’s interest in a $6 million judgment.
Isley won a copyright infringement lawsuit against Bolton over the hit song “Love Is a Wonderful Thing.” That case is now on appeal in the U.S. 9th Circuit Court of Appeals.
If Bolton bought Isley’s interest in the judgment, the lawsuit would be over, since Bolton would owe any judgment to himself. The bankruptcy trustee has since decided that Isley’s assets will not be sold piecemeal.
Bolton’s lawyer suggested Tuesday that Bolton might attempt to outbid the Pullman Group and acquire all the Isley assets.
The Pullman Group, the inventor of the Bowie bonds, under which music assets are pledged to secure bonds and the debt repaid from the royalty stream, would pay approximately $2 million for the estate.
But because Pullman will separately pay Ronald Isley’s outstanding IRS bill of approximately $2 million so it doesn’t have to come out of the bankruptcy estate, the deal is valued by the bankruptcy trustee at nearly $5 million. EMI would also be paid $300,000 to give up its matching rights.
The Pullman deal has Ronald Isley’s support because once the bonds are paid off, the copyright in the songs reverts to him, or more likely, his estate.