A US federal court has upheld an arbitration panel\u2019s ruling that financially troubled music company Utopia Music must pay nearly USD $1.9 million to the former owners of Lyric Financial.<\/p>\n
As part of a multi-year acquisition spree, Switzerland-headquartered Utopia acquired<\/a> Lyric Financial in October 2021.<\/p>\n According to court documents, Utopia Music \u2013 which recently rebranded<\/a> itself as Proper Music Group<\/strong> \u2013 agreed to pay $8 million<\/strong> for Lyric Financial, with $5 million<\/strong> to be paid upfront, plus two deferred payments of $1.5 million<\/strong> to be made at later dates.<\/p>\n Lyric Financial\u2019s former owners went to court in September 2023, stating that they had never received the final $1.5 million payment from Utopia. The case was sent to a London-based arbitration tribunal, which ruled in favor of Lyric Financial\u2019s former owners in June of this year.<\/p>\n The arbitrator ordered Utopia to pay the full amount owed, plus interest and expenses, which came to $1.863 million<\/strong>.<\/p>\n On Friday (July 19), the US District Court for the Southern District of New York upheld that decision in a civil judgment, ordering Utopia to pay the full amount owed, plus additional interest from the time the court petition was filed to the moment Utopia makes the final payment. The full order can be read here<\/a>.<\/p>\n Lyric\u2019s former owners include Tennessee-based Music World Entertainment Corporation<\/strong> and EDE LLC<\/strong>, a company owned by Richard Eli Ball<\/strong>, and Claritas Private Credit Fund<\/strong>, among others.<\/p>\n Lyric Financial provides advances to artists, songwriters, producers, record labels and music publishers, in exchange for future royalty income streams. It was one of more than a dozen acquisitions made by Utopia as the company scaled up in an apparent bid to establish itself in numerous aspects of the music industry, including distribution, financing, data, and royalty management.<\/p>\n Those wide-ranging plans began to sour<\/a> as the company faced increasing financial pressures, which Utopia has hinted resulted from the spike in interest rates seen in recent years.<\/p>\n Utopia has implemented multiple rounds of layoffs, which have resulted in staffing levels falling from around 1,200<\/strong> to some 250<\/strong> full-time equivalent positions, excluding contractors and staff at its UK physical music distribution warehouse.<\/p>\n The company also sold off some of its many acquisitions, including music publishing platform Sentric<\/strong>, which it sold<\/a> to France-headquartered Believe<\/strong> in the spring of 2023, and Absolute Label Services<\/strong>, which Utopia sold to its original management team<\/a> in the summer of 2023.<\/p>\n