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Hipgnosis Songs Fund has filed a lawsuit against Barry Manilow over bonuses paid following the purchase of the American singer’s back catalogue.
A lawsuit filed Monday at London’s High Court described the case as a breach of contract, without providing further details.
Founded by entrepreneur Merck Mercuriadis, Hipgnosis has been a driving force behind the emergence of music rights as an asset class, using royalties from streaming, radio and performances to provide income to investors chasing profits in an era of record-low interest rates.
Hipgnosis, whose portfolio includes music from the Red Hot Chili Peppers and Shakira, acquired the rights to 917 of Manilow’s songs in 2020. The 81-year-old’s hits include Copacabana (At the Copa) AND Mandy.
In a statement to the Financial Times, Hipgnosis said: “During discussions with Mr Manilow’s representatives it became clear that there was a difference in the interpretation of certain clauses in the sales agreement relating to bonus payments.”
According to a person familiar with the matter, the dispute involves a sum of several million dollars.
Representatives for Manilow did not respond to requests for comment.
At the time of the sale, Manilow praised Mercuriadis for creating a “new kind of music company.” Mercuriadis described Manilow as an “international treasure.”
Last year, Billboard reported that Rod Stewart had backed out of a potential catalog sale to the company aVsceker two years of negotiations.
The lawsuit follows a disastrous period for Hipgnosis, where rising interest rates undermined its business model, sending its share price below the valuation the group had placed on its music portfolio.
Earlier this year, Hipgnosis agreed to a $1.6 billion buyout from private equity group Blackstone. Mercuriadis said last month he would step down aVsceker the sale was completed.
