Label set to dissolve in December
Maverick Records, the music label jointly owned by a group including Madonna and Warner Music Group, has lost more than $64 million since 1999, according to a recently unsealed lawsuit.The former Time Warner unit, bought last month by an investor group led by Edgar Bronfman Jr., asked a Delaware judge to rule the company hasn’t violated its agreement with Maverick, whose artists include Alanis Morissette and Michelle Branch, in a dispute over the partnership’s dissolution. The case was unsealed April 15. Maverick officials filed suit in state court in Los Angeles last month alleging Warner Music didn’t adequately fund the label. In its suit, Warner Music dismissed that claim, citing the label’s $64.2 million in losses over the last six years. It says Maverick’s suit is a bargaining chip in negotiations over the 12-year-old partnership’s dissolution later this year. “Maverick has invented and asserted trumped-up and baseless claims of fiduciary breach and breach of contract against its long-term partner,” Warner Music said in the suit. The joint venture that owns Maverick is scheduled to dissolve in December and Warner Music has the right buy the 60% of the label it doesn’t own at that time, according to court papers. Madonna and other investors in the label must reimburse the world’s third-largest record company for $92.5 million in losses, loans and fees to have an option to buy Warner Music’s 40% of the label. Neither lawyers for Maverick nor a spokeswoman for Madonna were available to comment on the allegations in Warner Music’s suit, filed March 25 in Delaware Chancery Court in Wilmington, Del.
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