Business News Legal Live Business

Metropolitan Entertainment sues CMJ after failed merger

By Chris Cooke | Published on Friday 18 October 2013

With the annual CMJ festival currently busily underway in New York, this was a timely week for the New York Times to bring to wider attention a legal squabble that is underway between the live music and media business and its one time suitor, live and management firm Metropolitan Entertainment.

CMJ and Metropolitan announced that they were merging four years ago in a surprising deal that, we assumed, was attractive to the latter business because of the good reputation of the annual CMJ festival and the firm’s connections in the American student market. But that there deal never actually went ahead, despite the 2009 announcement.

Metropolitan Entertainment now claims that while it was in talks with CMJ about the merger, it provided loans to the company to the tune of $595,307 (loans which have since incurred $178,827 in interest). But those loans were never repaid, Metropolitan says.

Metropolitan chief John Scher also alleges that CMJ’s owners, having seemingly found new investors, set up a new company and transferred their business’s assets into it, without the debts, and subsequently told Scher that he had no claim for repayment from the current CMJ firm.

Scher told Billboard this week: “My partner and I went and had a meeting with [the current CMJ management]. They looked us in the eye and they said ‘We’ve taken over CMJ, and we’d like to work together’. We said ‘Well there’s a little thing about the $600,000 or $700,000 you owe us’. They said ‘Well you’re not gonna get it. You’ve got a claim against old CMJ’. I thought ‘I’m not a lawyer, but that can’t be legal'”.

But, responding to this week’s New York Times report, the CEO of CMJ Holdings Alexis D’Amecourt, has told reporters that he believes Scher’s lawsuit is without merit, adding:
“To that end CMJ timely filed [a rebuttal], and has pending before the court a motion to dismiss the action”.