Utopia Music acquired Lyric Financial in 2021. Lyric’s sellers are still trying to get paid in full for sales

Nearly three years after Utopia Music bought music financing platform Lyric Financial, Lyric’s former owners are still fighting for full payment from the embattled Swiss music company.

The former owners of the Lyric have asked a federal court in New York to uphold an arbitration ruling that enjoins Utopia – which recently renamed itself The Right Band – to make the final payment in October, 2021, the acquisition of Lyric Financial.

According to court documents, Utopia agreed to pay $8 million of Lyric Financial, in the form of a $5 million prepayment and two deferred payments of $1.5 million each one.

Utopia still hasn’t paid the final $1.5 million payment, the sellers said in a complaint filed in the US District Court for the Southern District of New York, which can be read in full here.

Lyric Financial provides advances to musicians, songwriters, producers, record labels and music publishers, for future income.

It was one of 15 acquisitions by Utopia in a buying spree over the past few years, which is believed to have led to the music company’s ongoing financial problems.

The company attributed its financial problems to rising interest rates seen over the past few years.

Utopia has gone through several rounds of layoffs, which has led to declining staffing levels in surrounding areas 1,200 to others 250 full-time equivalent positions, excluding contractors and staff at its UK warehouse.

Despite the layoffs, the company appears to be continuing to struggle financially. This past spring, it went to its shareholders asking for an emergency €6 million (approx. $6.4 million) investment.

At the arbitration hearings in London, Utopia Music revealed that it had not paid the deposit to Lyric’s owners because they had failed to deliver on the condition of the sale, which was to deliver ARTiEa new tool for Lyric Financial customers that allows users to consolidate “multiple online income streams that require separate logins into one simple dashboard for all income streams.”

Utopia said the ARTiE product delivered by Lyric Financial did not meet the terms of the sales agreement, and Utopia had to use its own funds to build another.

Owners of Lyric Financial – including Tennessee-based Music World Entertainment Corporation again EDE LLCa subsidiary of Richard Eli Ballas well as Claritas Private Credit Fund – argued that they had delivered ARTiE as promised.

They said it was the second payment of the $1.5 million payment that was conditional on the delivery of ARTiE, not the third and final payment of $1.5 million. They argued that, since Utopia had made that second payment, the music company had actually accepted ARTiE’s delivery.

In its decision, issued on June 17 of this year, the London Court of International Arbitration (LCA) largely sided with the former owners of Lyric, noting that records show that Utopia’s management accepted the delivery of ARTiE on the Zoom phone in May 2022.

The arbitration panel also noted that Utopia failed to explain in what ways ARTiE was lacking.

It ordered Utopia to pay the former owners of Lyric Financial $1.5 million, plus legal fees, arbitration costs and interest from the time payment was due in April 2023. The arbitration panel’s decision can be read in full, here.

According to documents filed in New York District Court, that goes further than that $1.86 million. The Lyric’s former owners said they had not been paid when they filed the paperwork on Wednesday (July 3).

The petition by the former owners of Lyric asks the court to enforce the previous decision of the arbitration court, and suggests that the money for the final payment can be taken out of the income of Lyric Financial, which now goes to Utopia Music.

“Utopia Music is expanding and should be paid for, among others, from American association of composers, writers, and publishers (ASCAP), Broadcast Music, Inc. (BMI), Sony Music Publishingagain TuneCore,” the petition said.Music Business Worldwide