Backstreet Boys' firm sues N.Y. record company (September 21' 98)

Back - Index - Submissions - - What is RSS? Date: Oct 02, 2098 Source: Submitted By: Alex Finkelstein Staff Writer ORLANDO -- Trans-Continental Records Inc., a recording firm headed by embattled entrepreneur Louis J. Pearlman, has filed a $100 million trademark infringement lawsuit against New York's Zomba Recording Corp. Pearlman's company is asking Zomba for payment of all revenue generated to date by his client, the Backstreet Boys musical group of Orlando, an amount alleged by Trans-Continental to exceed $100 million. The Boys' songs have been recorded on Zomba's Jive Records label since 1993. The Zomba suit is related to but not tied in with a pending $10 million fraud suit the Boys filed in Orlando federal court against Pearlman and two other Orlando managers. The group, which recently won an MTV award for Everybody (Backstreet's Back) in the Best Group Video category, allege their three managers and longtime friends pocketed $10 million in recording revenue while giving the singers only $300,000 since 1992. Through a spokesman, Pearlman says, "This litigation represents what can best be described as a family disagreement." Adds John Wright, "Like all family disagreements, once in awhile there has to be a scapegoat. And sometimes those closest to the family are made the scapegoat." But in a recent court filing, attorneys for the Boys allege, "Unlike the typical artist-manager relationship where the manager works for the artist, under the contracts created by these defendants, the plaintiffs are essentially their managers' indentured servants." All of the parties in both suits are trying feverishly to avoid a jury trial by settling the issues out of court. Meanwhile, a new controversial element has surfaced. John Wright, one of the The Backstreet Boys' three personal managers, denies street talk that Pearlman has fired him and his wife, Donna Wright, or that a $10 million lawsuit has been filed by Pearlman and the singers against the Wrights. "Here is what's happening," John Wright told Orlando Business Journal in a telephone interview. "We are in the middle of negotiations on our five-year contract which has another year to go." "There are certain conditions that we have been asked to concede or give up. How we approach and respond to those conditions will determine if we may or may not continue" with The Backstreet Boys. Wright, who managed the New Kids on the Block vocal group years ago and currently manages the N'Sync musical group, says "for better or for worse, we will be with The Boys for at least another year. We will be there for the Boys at the end of the day." Wright and his wife operate Wright International Records and Entertainment Inc., Wright-Stuff Productions Inc. and Wright-Stuff Management Inc. The Wrights, along with Pearlman and Robert Fischetti, a director of Trans-Continental, are defendants in The Backstreet Boys' pending management suit which seeks to overturn all of the existing contracts between the singers and their managers and management companies. The six-count trademark suit alleges Zomba, which recorded and distributed the Boy's two best-selling CDs, Backstreet Boys in the United States and Backstreet's Back in Europe, infringed on exclusive rights and ownership to the Backstreet Boys' trade name and trademark -- trademarks allegedly owned by Trans-Continental Records. The suit also charges Zomba with false designation of origin; unfair competition; rescission based on "international misrepresentation"; tortious interference with contractual relationships; and breach of contract. Zomba, however, argues TCR and Pearlman "relinquished their trademark rights" when they signed separate consulting and recording contracts with the New York recording firm. At stake are millions of dollars in royalties to the performers and their manager, and the right by the Backstreet Boys to control their own destinies and name. To date, with over 20 million records sold worldwide, Zomba has yet to pay royalties, contending that they have not yet recouped their investment, says Jay Marose, vice president/public relations for Trans-Continental. "Mr. Pearlman and the Boys have yet to see a dime" in royalties from Zomba. "This simple fact should also go a long way toward addressing the actual distribution of funds between Mr. Pearlman and The Boys," says Marose. Behind the new legal jockeying are the separate recording and consulting contracts whose validity is being challenged in the two pending suits. In September 1993, singers Brian Littrell, Howard "Howie" Dorough, Alexander "A.J." McLean and Kevin Richardson signed a recording agreement with TCR. Six months later, TCR and Zomba signed a consulting contract at the same time the Boys signed a recording agreement with Zomba. The recording contract allegedly gives Zomba the exclusive rights to sell recordings produced by Backstreet Boys Inc. of the Backstreet Boys. The consulting contract provides Zomba with TCR's consulting services. "According to the performers, their act has since generated revenue in excess of $10 million," under Zomba's Jive Records label, states an unsuccessful motion by Pearlman and his management firms to consolidate the two suits. "Ultimately, all the parties to both actions are vying for control to the rights of the Backstreet Boys' trademarks and, therefore, the right to control and profit from the various merchandising and exploitation of the marks," the motion says. Zomba's request to have the suit transferred to New York's federal court has been approved by Orlando federal Judge Anne C. Conway. Zomba argued successfully that contract clauses stipulate disputes among the parties should be heard first in the New York area. © 1998, Orlando Business Journal Comment on this item. Recent Comments Submitted by: johnanz http://imrdsoacha.gov.co/silvitra-120mg-qrms Submitted by: chocopie H1ncL9 Way cool! Some extremely valid points! I appreciate you writing this post and the rest of the site is also really good. Submitted by: link building FOgg1h I think this is a real great blog article.Really thank you! Fantastic. Comment on this item. Next Item: Backstreet Boys Resume Legal Struggle With Business Manager (September 23' 98) Prev Item: Howie Dorough's Statement Regarding The Death of his Sister (September 23' 98)