Record business veteran Michael Bone has sued Capricorn Records and Phil Walden, charging that they had reneged on an agreement to pay him 5% of the proceeds from the December sale of Capricorn to Volcano Entertainment.
Bone, whose music industry career has spanned nearly 30 years, told Daily Variety, “I am very disappointed and personally hurt that after a long, warm, and fruitful relationship with Capricorn Records and Phil Walden that it has to come to this.”
The complaint, filed Thursday in L.A. Superior Court by music attorney Howard King, states Bone was induced in 1998 to become the general manager of Atlanta-based Capricorn with a contractual promise that he would receive 5% of net profits upon the sale of the company.
The complaint alleges fraud and breach of contract, stating that the sale of Capricorn netted Walden and his son Phil Walden Jr. millions of dollars. It does not specify Bone’s damages, instead seeking an accounting, stating that Bone has been denied access to records.
According to the complaint, Walden and his son’s profligate lifestyle created a financial crisis at the label, which is home to the strong-selling acts 311, Cake and Widespread Panic. Among several allegations are charges that Phil Walden and/or his son used company funds to pay transportation costs for “personal companions,” created a hostile work environment by having an extramarital affair with a company employee and used company funds for family vacations.
Despite the financial mismanagement, according to the complaint, Bone was ultimately able to engineer a sale of Capricorn to Volcano through his extensive contacts.
Bone was hired as exec VP and general manager of Capricorn Records in March 1998 as Capricorn had come into its own after being jumpstarted by Walden in 1991. The label was the bastion of Southern rock in the 1970s, home to acts such as the Allman Brothers Band, but was shuttered when the music fell out of favor in the 1980s.
Bone had gone to Capricorn after a turbulent run at the beginning of the decade. In July 1992, he was hired by Def American after holding the title of president at three different labels (Chrysalis, Island and Mercury) in three years. He was sued for sexual harassment by a female assistant in 1990, a case that was settled out of court.
Walden could not be reached for comment.
(Phil Gallo contributed to this report.)