News createt: 10-01-2011
EPE sues Chrysalis for more than $5 million
"Elvis Presley Enterprises claims Chrysalis Music Group owes it more than $5 million in licensing fees for The King's music. Presley Enterprises accuses Chrysalis of "an astonishing lack of internal controls and related failures," and "failure to properly render payment" of "substantial sums."
Co-plaintiff Belinda Aberbach is an heir of the estates of Julian and Jean Aberbach who, with Presley's manager Col. Tom Parker, set up two New York corporations in the mid-1950s to control copyrights on "certain musical compositions recorded by Presley." The corporations are Gladys Music and Elvis Presley Music.
Presley owed 25% of each corporation, Parker owned 25%, and the Aberbachs owned 50%, according to the complaint in New York County Court.
After The King died in 1977, a series of assignments left Elvis Presley Enterprises (EPE) owning 50% interest in the compositions, and the heirs of the Aberbach's owning the other 50%. After trusts were set up, EPE remained 50% owner, and co-plaintiff Aberbach owns another 25%, according to the complaint.
Under a 2002 agreement, Chrysalis was to collect revenue worldwide and deposit it correctly into accounts for EPE and Aberbach. Chrysalis also was "obligated to promote and attempt to obtain licenses with third parties for use of the compositions."
Chrysalis was to get commissions of 5% to 8%, but no more than $400,000 a year, according to the complaint. But the complaint states: "Despite repeated assurances to EPE and Aberbach that proper controls were in place for its royalty processing, in fact, Chrysalis suffered from an astonishing lack of control and related failures. As a result, Chrysalis has failed to pay EPE and Aberbach substantial sums they are owed under the agreement. Chrysalis' failure to properly render payments to EPE and Aberbach constitutes a breach of the agreement."
The plaintiffs say Chrysalis also failed to promote the licensing of the music, "resulting in innumerable lost opportunities and revenues that EPE and Aberbach would have otherwise obtained;" and failed to keep true and accurate records.
They say Chrysalis commingled funds, took more commissions that it was entitled to, miscalculated foreign currency exchange rates, "claimed, without documentation, that there were overpayments," "erroneously deducted certain advances it claims were unrecouped," "failed to properly account for revenue received," and "made numerous other errors."
The plaintiffs demand no less than $5 million, and costs. They are represented by Glen Silverstein with Leader & Berkon."