TVT FIRE SALE DRAWS
BANDS' IRE
The label, which earlier this year filed for a Chapter 11 reorganization, with listed debts of $24 million (see hitsdailydouble.com, 5/12/08), rather than a full on Chapter 7 bankruptcy, is ready to auction off its assets this Friday (6/13). With that date approaching, several of the rock bands on its roster have already taken court action, including Ambulance Ltd. and the Polyphonic Spree, as well as major Universal Music Group.
In order to complete the sale, TVT must assume and then assign its valid artist contracts to the purchaser, which involves curing any breaches, or unpaid monies. In the original list of executory contracts, TVT listed that debt for its artists, with few exceptions, as $0.00.
Now the artists are speaking up. Ambulance Ltd. filed papers last Friday (6/6) objecting to TVT’s assumption that they can assign or sell its contract, which can be viewed here. The band is currently not allowed to release any new music, specifically their second album. A copy of Polyphonic Spree’s complaint can be found here, while UMG’s filing, which has to do with unpaid sample and licensing fees for artists such as Pitbull, Snoop Dogg and Tara Thomas, used on TVT soundtracks and compilations, can be read here.
The bands dispute not only TVT’s ability to assign contracts without adequate assurance of future performance (who do you propose to sell the contract to and can they meet the numerous obligations specified under the contract, including the sale and marketing of records) but their right to assign "personal service" contracts at all without the consent of the counterparty.
