According to reporting from Billboard, Canadian performing rights organization SOCAN is being sued for $16 million plus legal fees and interest by original investors of American music publishing rights management firm Audiam, which SOCAN purchased in 2016.
According to amended complaint from Jan. 23, 2020 made in NY County State Supreme Court, the Audiam investors claim they are owed three payments in the totals of $7.5 million, $2.5 million, and $6 million because Audiam achieved revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization performance) targets during the period of Jan. 1 2018 to June 30, 2019. SOCAN did pay an earnout for a period of July 1, 2016 to Dec. 31, 2017.
"When SOCAN purchased Audiam, I believe many of us Audiam investor's saw this as a positive thing," Victory Records founder Tony Brummel, one of the Audiam investors, told Billboard. "SOCAN is supposed to have been created by music people for music people- to collect for and pay songwriters and copyright owners. Audiam over performed, beat all forecasted numbers post purchase and now Audiam and its investors, the initial believers, are being punished for it. SOCAN's business is predicated on trust but we, obviously, cannot trust them…Unfortunately, SOCAN is punishing instead of embracing the entities that helped support a spectacular business that does great things for songwriters and copyright holders and publishers."
SOCAN’s chief legal officer and general counsel Andrea Kokonis told Billboard that “the matter is solely of a corporate law nature and SOCAN is confident that its position will be fairly assessed and validated by the courts."
For more details, read the Billboard report HERE.