This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Business News Legal Live Business
SFX settles with its other alleged founders
By Chris Cooke | Published on Tuesday 26 January 2016
There was a time when you could brag about being one of the people behind the buzzy, booming, bullish EDM powerhouse that was SFX. Though as bankers and consultants busy themselves trying to work out how to rescue the company – with its wobbly financials, tanked share price and mountain of debt – perhaps that’s no longer so much something to put at the top of your brag list.
So comes the news that SFX founder Robert FX Silleman has settled a legal battle with three other men who claimed that they too were behind the dance music company, but were frozen out of the business just as it was gaining momentum and value.
As previously reported, Paolo Moreno, Lawrence Vavra and Gabriel Moreno claimed that Sillerman approached them in early 2012 to discuss his then fledgling plans for an electronic music-focussed company. They then alleged that, because he had no experience in that side of the business, Sillerman used the three men’s expertise to indentify and buy many of the new firm’s initial acquisitions.
The lawsuit then claimed that the three men should have received shares in the business in return for their efforts which, while worth little now, could have netted them over $100 million when SFX floated on the NASDAQ stock exchange in 2013.
Said the legal papers filed in early 2014: “Had they known that Sillerman’s true intentions were to use plaintiffs’ strategy, information, connections and access for his own gain, without granting plaintiffs any significant ownership interest in the venture, plaintiffs would not have entered into any agreement with Sillerman, and would not have undertaken to execute on the strategy for the benefit of SFX”.
For its part, SFX insisted that the claims were “baseless” from the off, with Sillerman attempting to secure a summary judgement in his favour. Last summer a judge ruled that the claimants had provided sufficient evidence – in particular emails between Sillerman and Paolo Moreno – for the case to proceed to full trial.
That won’t now happen. Papers filed with the court on 22 Jan confirm that all parties have now settled the dispute. Terms are obviously not known, but the court papers read: “Plaintiffs Paolo Moreno, Gabriel Moreno and Lawrence Vavra and defendants SFX Entertainment Inc and Robert FX Sillerman herby jointly notify the court that the parties have signed a settlement agreement to resolve this matter in its entirety”.
So, a little bit of good news for SFX HQ, while those bankers and consultants keep digging for a beats-heavy business turnaround strategy.
