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1. Songwriter's Royalties in a Bind
Highest Court California Court of Appeal
Year Ended 2011
Plaintiffs Financial Institution(s)
Defendants Financial Institution(s)
Pullman, David
Other Page, Gene
Short Description This lawsuit is one of several over the last few years involving the financial transaction of David Pullman, a somewhat well-known figure in the music industry for his role in creating so-called "Bowie Bonds," named after David Bowie, the artist who first used them. Bowie Bonds are investment vehicles wherein purchasers buy debt from recording artists, to be repaid, with interest, through royalty payments owed to the artist. This lawsuit appears to involve this same sort of transaction regarding the royalty interests of songwriter Gene Page. Page's family took loans from Plaintiff, a financial company that loans money to artists to be repaid from royalties, but was also involved, to some extent, with Pullman and his entities. Pullman's parties offered to investigate some suspect financial transactions between Plaintiff and Page's family, including a loan to a family member of Plaintiff's owners, and Plaintiff assigned to Pullman the rights to do so. After Pullman brought suit against Plaintiffs for numerous causes of action, including conversion, fraud, interference, civil conspiracy, and numerous equitable actions not specifically listed in this entry, Plaintiff sought to enforce an arbitration agreement contained in one, and only one, of the many loan agreements between Plaintiff and the Pages. The American Arbitration Association (AAA) found the arbitration agreement enforceable, and the parties submitted to arbitration, which ended in Pullman/Page's favor for over $1/2 million. This lawsuit was brought by Plaintiff to vacate the arbitration award, alleging no court of law ever found the agreement binding. Though the AAA had upheld the provision, the court agreed and concluded that no court of law had upheld it, and thus the arbitration was not binding. If a party objects to arbitration, the resulting award cannot be binding absent a judicial determination. The award was vacated, and a court must now determine whether arbitration is mandatory. - LSW


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2. James Brown Bonds?
Highest Court New York Supreme Court, Appellate Division
Year Ended 2009
Plaintiffs Brown, James
Business Entity of Artist(s)
Defendants Financial Institution(s)
Pullman, David
Other No Other parties on file
Short Description This lawsuit involves an obscure little investment vehicle known as a "Pullman Bond," though it is probably better known as a "Bowie Bond," named after David Bowie, the pop star that first utilized it. In the late 1990s, Bowie issued asset-backed securities of revenues generated by his pre-1990 albums, offering an interest rate of 7.9%, to be paid out of royalties from those albums. Bowie cashed in $55 million from the deal, though he forfeited 10 years worth of royalties (the life of the bonds). This lawsuit does not involve Bowie, but James Brown, who used a similar process in securing a $26 million loan from Defendant, the Pullman Group for which the Pullman Bond is known, shortly after Bowie's deal was finished. Brown pledged future revenue in exchange for the $26 million loan, but also promised Pullman, in writing, that he would refinance the assets "upon future recoupment of the securities" with Pullman alone. When Brown tried refinancing through a third party, Pullman sent a notice to that company, as well as Brown and his entities. The refinancing transaction broke down, and Brown sued for declaratory judgment of non-breach and for interference with business relationships. Pullman counterclaimed for declaratory judgment and breach of contract. The definition of "recoupment," as intended by the parties, determined whether there was a breach. Brown's claims for interference with business were dismissed, since Pullman's letter was only intended to explain its financial interest. So was Pullman's action for breach, since the refinancing, if it were a breach, was never consummated. Furthermore, a declaration of breach or non-breach is pointless, because the refinancing was abandoned. - LSW


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