A highly unusual contract provision has helped clear the way for Herb Alpert and Jerry Moss, the “A” & “M” in A&M Records, to file a $200 million breach of contract lawsuit against Seagram and its Universal Music Group.
L.A. Superior Court judge Aurello Munoz cleared the way Wednesday for attorneys for Alpert and Moss to file the lawsuit, which asserts breach of contract and breach of fiduciary duty. The suit was filed shortly after the hearing.
Lawyers for the pair had sought the court’s permission to add the new claims to an existing lawsuit filed in May 1998 against UMG over profits Alpert and Moss claimed they are owed.
The new lawsuit, which had been expected (Daily Variety, June 23), claims Universal execs have destroyed A&M Records following UMG’s $10.4 billion acquisition of Polygram last year.
The lawsuit turns on the unusual provision, dubbed an Integrity Clause, which Alpert and Moss had in their sale agreement. The duo, who bowed A&M Records in 1962, sold it to Polygram for $500 million in 1989. Typically, principals remain involved for only a year following a sale and have no role in determining a label’s future under new owners, but in this case, the contract stated that the integrity of A&M was to be maintained for 20 years following the sale.
However, the exec and artist ranks at the label have been significantly reduced as part of UMG’s effort to shave expenses in the post Polygram-merger era. A&M has been folded into Interscope Records, and its La Brea offices have been shuttered.
As a result, the lawsuit asserts that UMG, as the successor of Polygram, has violated the terms of the 1989 sale agreement, and Alpert and Moss are entitled to additional compensation as a result.
“We are pleased the court granted our motion and allowed Jerry and Herb to sue UMG for what they’ve done to A&M,” attorney Richard Posell, of Greenburg, Glusker, Fields, Claman and Machtinger, told Daily Variety.
The duo was also entitled to profits for five years from the sale’s 1990 closing, money they say they’ve never received.
The court still must review the 100-page sale agreement signed by Alpert and Moss, but Munoz ruled Posell sufficiently proved the new claims can be filed.
A UMG spokesman said it does not comment on ongoing litigation.
Value in name
Alpert and Moss asserted that the evisceration of A&M by UMG brass reflects poorly on the duo and irreversibly damages their industry reputation and stature.
Because they are both still active in the music industry through Almo Sounds and Rondor Music, the cache of having an active A&M label that bears their name has been lost, they assert. There is also a sentimental value attached, Alpert and Moss said.
The pair would like to see A&M Records restored and stand again as a symbol of an artist-friendly outpost and not merely an imprint inside a larger label.
The label has been home to a diverse roster of acts such as Sting, Janet Jackson, Styx, Joe Cocker, Sheryl Crow, Cat Stevens and Supertramp.