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Pras accused of fraud in relation to HarbourView rights deal
By Chris Cooke | Published on Friday 21 October 2022
A US-based company called Open On Sunday LLP has sued Pras and investment firm HarbourView over a rights deal they announced back in July. Open On Sunday claims that it had an existing loan agreement in place with the Fugees member that was secured on the rights he then sold to HarbourView in that deal.
Open On Sunday allows artists and songwriters to access upfront cash by selling their copyrights or royalty rights to the firm, with the option to buy them back down the line. HarbourView, meanwhile, is one of those equity funds that has been going around of late buying up music rights in big money deals, backed by Apollo Global Management.
In its lawsuit, Open On Sunday says that it agreed a deal with Pras back in January which included a loan agreement secured on royalties that the musician earns from Sony Music in relation to the Fugees’ output and his 1998 solo album.
In February, it alleges, Pras asked for that agreement to be amended so that the loan would be secured on a book deal for an autobiography rather than the music royalties. But Open On Sunday declined to amend the agreement in that way.
The musician also allegedly asked for another $3 million loan to fund his defence counsel in relation to the criminal investigation into his connections with Malaysian businessman called Jho Low and the so called 1MDB scandal.
Concurrent to all that, Open On Sunday claims, Pras failed to meet his obligations under the loan agreement. As a result, in May it began legal proceedings which included foreclosing on the assets the loan was secured on, ie his Sony royalties.
It was at that point that Open On Sunday discovered that Pras had done a deal with HarbourView. Or, in the words of the lawsuit, “after issuing the notice of default, plaintiff discovered that defendant [Pras had] fraudulently transferred the assets to defendant HarbourView”.
The lawsuit then alleges that – in order to “induce HarbourView” into acquiring the Sony royalty rights – Pras and his legal team forged a release document showing that Open On Sunday had agreed to accept the theoretical book deal as security on the loan, which it had not.
Open On Sunday also reckons that HarbourView should have done more due diligence. It accuses the investment fund of being “wilfully blind”, adding that it “eagerly accepted the release that they knew or should have known was forged”.
Pras is accused of breach of contract, while he and his legal team are also accused of fraud.
However, legal reps for Pras strongly dispute the version of events presented by Open On Sunday, insisting that an agreement was reached to secure the loan on the future book deal. With that in mind, attorney Robert S Maloni told Law360: “There was no forgery. It’s a bogus claim, the whole thing”.
