Sync agency Zync has sued Round Hill Music over allegations of contract breaches, unjust enrichment, trademark infringement and executive bullying in relation to a former joint venture which began with a deal in 2017. 

The lawsuit, says Zync, addresses numerous “egregious” breaches of that agreement by Round Hill. That includes “gross misstatement” of the joint venture’s income and expenses, and a failure to stop the “bullying and mistreatment” of Zync’s leadership by Round Hill executives. It also claims that Round Hill failed to pay millions of dollars that were due to Zync under the agreement.

Things seemingly didn’t go well with the joint venture pretty much from the start once that 2017 deal was done. The lawsuit claims that it became “immediately apparent” that “key members of Round Hill’s leadership were rude, dismissive and oppressive”. It also says that Round Hill’s platform was “utterly disorganised and inefficient”.

“Indeed”, it adds, “Round Hill’s records and materials relating to its own assets were in such shambles that Zync was not even able to ascertain what works were included in Round Hill’s catalogue, let alone have adequate materials to be able to pitch and monetise them”. 

Zync launched as a music publishing and sync licensing company in 2002. Under the 2017 deal, Round Hill acquired Zync’s core business, including its client agreements and associated rights, although not the Zync brand and accompanying trademark. 

Round Hill and Zync - and Zync’s leadership team of Marisa Baldi and Sanne Hagelsten - then formed a joint venture that would sign new deals with artists and songwriters. It would also seek sync opportunities for the catalogues of music acquired by other Round Hill entities, including its investment funds. Baldi and Hagelsten would lead the new business, while Round Hill would provide back office support and handle the administration of the rights.

With tensions building between Zync and Round Hill, Hagelsten left the business in 2019. The lawsuit explains that her “frequent critiques” of Round Hill resulted in many Round Hill staff members treating her with “disdain and contempt”, which left her feeling “unwelcome”. 

A new deal was done to accommodate Hagelsten’s departure, with Baldi staying on to continue running the joint venture. 

The partnership continued through to 2022 but, Zync alleges, issues with Round Hill’s systems continued to negatively impact on the business. Meanwhile, other issues started to build around how Round Hill was accounting and reporting financial elements of the joint venture. 

Nevertheless, the lawsuit says that Baldi continue to work “in good faith” with Round Hill, “despite the erratic, bullying and passive-aggressive behaviour” shown to employees of both Zync and Round Hill - “especially female employees”, it notes - by executives “including Round Hill CEO, Joshua Gruss and COO Steve Clark”.

It also says that the Round HIll leadership team showed “indifference and apathy” when it came  to “fostering positive employee relations and engagement around cultural matters of concern”, including the Black Lives Matter movement and other “diversity, equity and inclusion practices”.

The joint venture finally came to an end in 2022. Under the terms of the 2017 agreement, Round Hill should then have drawn up a new deal to acquire the rights owned under the joint venture, and also in relation to the Zync brand, which was not part of the original acquisition. 

That led to a new dispute over the value of the deal. As negotiations dragged on, Zync then had further complaints over the continued operation of the joint venture and its use of the Zync trademark. 

The lawsuit accuses Round Hill of breach of contract, breach of implied covenant of good faith and fair dealing, conversion, unjust enrichment, unfair competition, trademark infringement and failures in accounting.

UPDATE 15 May 2024, 8.30pm: Round Hill has issued the following statement:

“Round Hill Music denies the allegations in the complaint filed by Zync Music Group. The dispute between Round Hill and Zync Music Group is a commercial dispute over the valuation of their joint venture partnership which is going through a dissolution and subject to an appraisal process. The specious and salacious allegations of the complaint are being used by Zync as a substitute for the failing merits of its case”.

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