Courthouse Steps

CAUSES OF ACTION: Breach of joint venture agreement; breach of fiduciary duty; inducing breach; fraud; accounting; declaratory relief; and injunctive relief.

COMPLAINT ALLEGATIONS: Maverick Records is a partnership between the plaintiffs and Warner Bros. Records started with $10 million in 1993. Since then, Maverick has generated revenues of $900 million and profits of $100 million for the Warner Music Group. The plaintiffs have been attempting to settle disputes over accounting for months and told the defendants that they would file suit in California if they were not resolved. On March 24, 2004, while negotiations were still in progress, the defendants without warning filed a preemptive action in Delaware ' a blatant instance of forum shopping. Members of Maverick include Tadpole, Wise Guy and Rosie. Madonna Ciccone is a partner in Tadpole, Guy Oseary is the managing partner of Wise Guy, and Ronnie Dashev is the managing member of Rosie. The defendants are all Warner affiliates. The defendants have breached the Maverick joint venture agreement by failing to provide guaranteed promotion and marketing services, improperly calculating profitability, and using improper accounting methodology to create the false impression of losses when, in fact, there were profits. The venture incurred costs of more than $30 due to the failure to provide services. Warner also failed to negotiate competitive rates with subsidiaries for services such as manufacture of recordings.