Cameo Clips

ARBITRATION PROVISION/FORMER BAND MEMBERS

The U.S. District Court for the Southern District of New York decided that a dispute between the rights- holder in the band N'Klabe and two former members of the Salsa group should be sent to arbitration. Nulife Entertainment v. Torres, 09 Civ. 1277. NuLife sued Hector Torres and Ricardo Porrata, who had both signed a N'Klabe agreement with NuLife, after the defendants formed the I Love Salsa Orchestra and set up their own music publishing company. A clause in the NuLife/artists agreement stated: “With the exception of any breach by you [the individual defendants] of your exclusivity to Label [NuLife] hereunder, any controversy or dispute arising out of or related to this Agreement or the breach or alleged breach of any provision of this Agreement shall ' be submitted ' to arbitration.”

NuLife's court complaint alleged breach of contract and trademark infringement. (N'Klabe is closely identified by fans with the phrase “I Love Salsa.”) But dismissing NuLife's suit without prejudice, District Judge John G. Koeltl noted: “Nulife claims that the defendants' alleged failure to perform [with N'Klabe in concert], their formation of an independent publishing company, their receipt of income from other music industry sources, and their use of the 'I Love Salsa' name all constitute violations of the defendants' contractual exclusivity obligations to Nulife. In light of the entire Agreement, it is clear that the arbitration clause's exception refers to any potential breach by the defendants' of their exclusive recording services obligations to Nulife. ' However, Nulife does not plead facts showing that the defendants have recorded with any other company or have done anything else to breach Nulife's exclusive entitlement to the defendants' recording services.”

The U.S. District Court for the Southern District of California granted summary judgment in favor of a group of international film distributors that sued for repayment of distribution advances after Bob Yari's Persik Productions (BYP) missed several film release deadlines. Alliance Atlantis Releasing Ltd. v. Bob Yari Productions, 08-5526-GW (SSx). The breach of contract and declaratory relief action involved what U.S. District Judge George H. Wu described as “five (tortuously worded) letter agreements” for international distribution of the BYP movies Addicted and The Accidental Husband. Judge Wu explained: “[E]ach of the five letter agreements in this case set deadlines by which Plaintiffs were entitled to satisfaction of a U.S. theatrical release commitment. Under three of the five letter agreements, the release deadline passed two years after the completion of principal photography on the applicable film. Under the other two letter agreements, the film needed a qualifying theatrical release by a date confirmed in a 'Six Month Notice,' and, upon a missed release, Plaintiffs were entitled to a 'Three Month Notice.' Both films missed all release deadlines. These performance failures required BYP to accept a 'Put' [back to it] of Plaintiffs' distribution rights and to repay the distribution advances plus interest unless the parties, during a specified 30-day period in which the parties were contractually required to engage in good faith negotiations, agreed to a reduced distribution amount.” As to Addicted, Judge Wu found: “Treating the requirement to negotiate in good faith as a condition precedent to Plaintiffs' right to assign their rights to BYP and to require BYP to repay advances, Plaintiffs have shown that BYP prevented its performance, and therefore its non-occurrence is excused.” The district judge acknowledged that the “issues are perhaps slightly more complicated (and Plaintiffs' arguments a bit less satisfying) with respect to the Husband Letter Agreements.” But the judge continued: “Plaintiffs, however, contend that their letters of March 31, 2009 [to BYP's counsel and to a BYP licensee] commenced contractual negotiations, and that BYP prevented negotiations from occurring by failing to engage in negotiations during the ensuing 30-day period. ' BYP has not offered any meaningful argument as to why Plaintiffs' March 31, 2009 letter should not be deemed to have started the 30-day negotiations period, during which BYP (and not Plaintiffs) failed to negotiate in good faith.”

ARBITRATION PROVISION/FORMER BAND MEMBERS

The U.S. District Court for the Southern District of New York decided that a dispute between the rights- holder in the band N'Klabe and two former members of the Salsa group should be sent to arbitration. Nulife Entertainment v. Torres, 09 Civ. 1277. NuLife sued Hector Torres and Ricardo Porrata, who had both signed a N'Klabe agreement with NuLife, after the defendants formed the I Love Salsa Orchestra and set up their own music publishing company. A clause in the NuLife/artists agreement stated: “With the exception of any breach by you [the individual defendants] of your exclusivity to Label [NuLife] hereunder, any controversy or dispute arising out of or related to this Agreement or the breach or alleged breach of any provision of this Agreement shall ' be submitted ' to arbitration.”

NuLife's court complaint alleged breach of contract and trademark infringement. (N'Klabe is closely identified by fans with the phrase “I Love Salsa.”) But dismissing NuLife's suit without prejudice, District Judge John G. Koeltl noted: “Nulife claims that the defendants' alleged failure to perform [with N'Klabe in concert], their formation of an independent publishing company, their receipt of income from other music industry sources, and their use of the 'I Love Salsa' name all constitute violations of the defendants' contractual exclusivity obligations to Nulife. In light of the entire Agreement, it is clear that the arbitration clause's exception refers to any potential breach by the defendants' of their exclusive recording services obligations to Nulife. ' However, Nulife does not plead facts showing that the defendants have recorded with any other company or have done anything else to breach Nulife's exclusive entitlement to the defendants' recording services.”

The U.S. District Court for the Southern District of California granted summary judgment in favor of a group of international film distributors that sued for repayment of distribution advances after Bob Yari's Persik Productions (BYP) missed several film release deadlines. Alliance Atlantis Releasing Ltd. v. Bob Yari Productions, 08-5526-GW (SSx). The breach of contract and declaratory relief action involved what U.S. District Judge George H. Wu described as “five (tortuously worded) letter agreements” for international distribution of the BYP movies Addicted and The Accidental Husband. Judge Wu explained: “[E]ach of the five letter agreements in this case set deadlines by which Plaintiffs were entitled to satisfaction of a U.S. theatrical release commitment. Under three of the five letter agreements, the release deadline passed two years after the completion of principal photography on the applicable film. Under the other two letter agreements, the film needed a qualifying theatrical release by a date confirmed in a 'Six Month Notice,' and, upon a missed release, Plaintiffs were entitled to a 'Three Month Notice.' Both films missed all release deadlines. These performance failures required BYP to accept a 'Put' [back to it] of Plaintiffs' distribution rights and to repay the distribution advances plus interest unless the parties, during a specified 30-day period in which the parties were contractually required to engage in good faith negotiations, agreed to a reduced distribution amount.” As to Addicted, Judge Wu found: “Treating the requirement to negotiate in good faith as a condition precedent to Plaintiffs' right to assign their rights to BYP and to require BYP to repay advances, Plaintiffs have shown that BYP prevented its performance, and therefore its non-occurrence is excused.” The district judge acknowledged that the “issues are perhaps slightly more complicated (and Plaintiffs' arguments a bit less satisfying) with respect to the Husband Letter Agreements.” But the judge continued: “Plaintiffs, however, contend that their letters of March 31, 2009 [to BYP's counsel and to a BYP licensee] commenced contractual negotiations, and that BYP prevented negotiations from occurring by failing to engage in negotiations during the ensuing 30-day period. ' BYP has not offered any meaningful argument as to why Plaintiffs' March 31, 2009 letter should not be deemed to have started the 30-day negotiations period, during which BYP (and not Plaintiffs) failed to negotiate in good faith.”