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Courthouse Steps
CASE CAPTION: Kittie Inc., Mercedes Sherida Lander, Morgan Lee Lander and Garth Richardson v. Sheridan Square Entertainment LLC d/b/a Artemis Records; U.S. District Court for the Southern District of New York # 03-21-2195.
CAUSES OF ACTION: Various breaches of contract, including the contractual duty of good faith and fair dealing.
COMPLAINT ALLEGATIONS: Kittie is a young female rock band from Ontario, Canada, whose debut album Spit was released on the Artemis label ' with which Kittie signed an exclusive recording agreement ' to critical acclaim and was certified gold. The band followed up this success with the release of three additional records and a video for Artemis. The Landers are members of Kittie. Richardson is the band's producer. Kittie retained the accounting firm of McGladrey & Pullen LLP to conduct an audit on of the record company's accounting books from June 1999 through June 2002. During the examination, McGladrey & Pullen uncovered numerous accounting discrepancies and an underpayment to the plaintiffs of more than $900,000 in royalties owed and breaches of the recording agreement by Artemis. These included use of an improper base price in calculating royalties, improper foreign royalty rate reductions, overcharges with respect to video production costs, miscalculations regarding free goods, excess reserves, double recoupment of producer and mixer advances, improper expense charges and foreign taxes improperly withheld.
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