SWITZERLAND (CelebrityAccess) – A US federal court has upheld an arbitration panel’s ruling, requiring financially troubled Utopia Music to pay nearly $1.9 million to the former owners of Lyric Financial.
Utopia, based in Switzerland and recently rebranded as Proper Music Group acquired Lyric Financial in October 2021 as part of its aggressive expansion strategy. The deal was valued at $8 million, with $5 million paid upfront and two deferred payments of $1.5 million each.
However, Lyric Financial’s former owners claimed they never received the final $1.5 million payment from Utopia and took the matter to court in September 2023. The case was moved to a London-based arbitration tribunal, which ruled in favor of the former owners in June 2024. The arbitrator ordered Utopia to pay the outstanding amount, plus interest and expenses, totaling $1.863 million.
On July 19, the US District Court for the Southern District of New York upheld this decision, mandating Utopia to pay the total amount owed and additional interest until the final payment.
Lyric Financial’s former owners include Tennessee-based Music World Entertainment Corporation, EDE LLC (owned by Richard Eli Ball), and Claritas Private Credit Fund, among others. Lyric Financial offers advances to artists, songwriters, producers, record labels, and music publishers in exchange for future royalty income streams. It was one of over a dozen acquisitions made by Utopia in an attempt to dominate various sectors of the music industry, including distribution, financing, data, and royalty management.
Utopia’s plans have since faltered due to financial pressures, partly attributed to rising interest rates. The company has undergone multiple layoffs, reducing its workforce from around 1,200 to approximately 250 full-time positions. It also sold off several acquisitions, such as music publishing platform Sentric to Believe and Absolute Label Services, back to its original management.
Despite scaling back operations, Utopia, now Proper Music Group, faces financial difficulties. Earlier this year, the company sought an emergency $6.4 million cash infusion from shareholders.
In arbitration, Utopia argued that they withheld the final payment because Lyric Financial failed to deliver a new tool, ARTiE, as stipulated in the sale agreement. Utopia claimed they had to fund the development of a replacement product. The arbitrator dismissed this argument, noting that the second payment, not the third, was contingent on ARTiE’s delivery, and Utopia had accepted the product by making the second payment.
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