MOTOWN ESTIMATES DAMAGES AT $60 MILLION IN NEW COMPLAINT AGAINST MCA INC.
MOTOWN ESTIMATES DAMAGES AT $60 MILLION IN NEW COMPLAINT AGAINST MCA INC. LOS ANGELES, March 12 /PRNewswire/ -- The following is being issued by Motown Record Co. L.P.; Motown Record Co. L.P today filed additional claims in its lawsuit against MCA Inc. and two of its music subsidiaries, for the first time estimating its damages against MCA -- at more than $60 million. The amended complaint, filed in Los Angeles Superior Court, contains new allegations that MCA and the two subsidiaries, MCA Records Inc. and UNI Distribution Corp., failed to perform its now terminated distribution agreement with Motown. In addition, the amended complaint contains allegations that MCA attempted to disrupt Motown's relationship with its new distributor, PolyGram, by selling Motown product to the market at prices believed to be below MCA's costs. In the supplemental filing, Motown also charged that MCA has systematically destroyed significant evidence relating to MCA's failure to promote Motown records. Documents destroyed by MCA include more than two months of weekly "wrap-up" reports created by MCA's pop promotion staff in the period immediately following the filing of this lawsuit, when MCA was given the opportunity to cure its contractual breaches. According to the new complaint, MCA's own remaining internal records illustrate that in mid-1991, when Motown had released hit records from Boyz II Men, Stevie Wonder and Another Bad Creation, "MCA continued to give preference to its own releases and failed to promote Motown's records or paid lip service to these records with pop radio programmers." Today's filing expands the lawsuit Motown filed against MCA last May 14 that maintained that MCA had breached its agreement to distribute and promote Motown records. Today's filing also repeats the allegations in the original suit that MCA had interfered with Motown's attempt to acquire GRP Records Inc. in 1989. The new complaint noted that since the original suit was filed MCA has conceded that it overcharged Motown by more than $2.1 million for compact disc manufacturing. Motown contends the actual amount of overcharges is still higher. The amended complaint, filed by Motown counsel Steven A. Marenberg of the Los Angeles law firm of Irell & Manella, states that Motown "conservatively estimates" that its damages exceed $60 million plus unspecified punitive damages. The filing also states that MCA has withheld more than $25 million in payments to Motown, including payments to the label for Motown records sold to MCA and payments by licensees for the right to use Motown recordings in, for example films and commercials. Last September, Motown signed a marketing and distribution agreement with PolyGram Group Distribution Inc., after Motown's operating committee voted to terminate its agreement with MCA. Jheryl Busby, Motown's president and chief executive officer, said when Motown filed its suit last year its immediate goal was to get MCA to live up to its contractual obligations to Motown or, failing that, to terminate its distribution agreement with MCA and find another distributor who would. "The goal has been achieved in our new and expanding relationship with PolyGram, which has given its full support to the Motown label," Busby said. "The new agreement with PolyGram was an important step in the writing of the 'second chapter' of the Motown story." Motown has achieved renewed success in the four years since its current owners bought the company from Motown founder Berry Gordy Jr. The label has landed recent hit records with such performers as Shanice, Stevie Wonder, Johnny Gill, Another Bad Creation, The Boys and Boyz II Men. Since January, Boyz II Men have won Grammy, Soul Train and American Music awards and have been honored with an NAACP Image award. -0- 3/12/92 /CONTACT: Michael Mitchell of Motown, 213-468-3553/ CO: Motown Record Co. L.P.; MCA Inc. ST: California IN: ENT SU:
DM-JL -- LA025 -- 7605 03/12/92 18:05 EST
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|Date:||Mar 12, 1992|
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