CMJ Sued for Close to $1 Million over Failed Merger
Published Oct 16, 2013Drake isn't the only one apparently facing legal trouble this week. The folks behind New York's annual CMJ Music Marathon — who are also responsible for the trade magazine CMJ New Music Report — have been sued for close to $1 million by Metropolitan Entertainment over a failed merger.
As the New York Times reports, CMJ and management/promotion company Metropolitan announced a merger back in 2009. Between that year and 2010, Metropolitan reportedly loaned CMJ close to $600,000 to help keep the festival running. The newly filed lawsuit claims that the debt is now worth almost $800,000, including interest. Metropolitan is also seeking $99,000 in legal costs and other fees.
Metropolitan exec John Scher told the newspaper, "We were going to take over a company that was habitually in the red, and make them a considerable payment, and they just decided to ignore that."
He added that CMJ had found another investor.
The suit claims that CMJ transferred its assets to another company to protect it from Metropolitan. Numerous attempts have allegedly been made to reach a settlement, but CMJ has not made good on its loans, according to the report. The lawsuit was initially filed in May.
If Metropolitan is successful in its suit, this could be a major blow for CMJ, since the company was valued at $2.4 million at the time of the merger.
CMJ Music Marathon is currently taking place in New York. It started yesterday (October 15) and will run to October 19.