The pop diva’s Maverick Records filed a $200 million lawsuit against Warner Music Group and Time Warner Inc. on Thursday, accusing the record label and its former parent company of breaching its contract through poor management and deceitful accounting which cost Madonna and her partners millions.
The suit, filed in Los Angeles Superior Court, claims Warner Music execs and other defendants “failed to abide by their contractual and fiduciary duty” by “engaging in acts of self-dealing and secret profit-taking, falsely accounting for receipts and expenses of the partnership [and] sacrificing the interests of the partnership and its partners for defendants own self-financial interests.”
The complaint by Madonna and business partners Guy Oseary and Ronnie Dashev seeks a court order terminating the joint venture, which started in 1992.
The superstar got into the legal groove after talks failed with Warner-owned since November by an investor group led by Edgar Bronfman Jr.-over whether the record label would continue to finance the Beverly Hills-based Maverick once their contract expires at the end of this year.
The two sides have been at odds for several months now over the value of Madonna’s vanity label, whose most well known hitmakers include Alanis Morissette and Michelle Branch.
According to the New York Times, the Material Girl and her partners estimate Maverick is worth $60 million, while Warner says the figure is much lower and claims the label hasn’t made a dime in six years.
Warner Music issued a statement taking pains to note that the dispute “in no way impacts the company’s deep respect for Madonna,” but that Maverick’s allegations are “baseless, unsubstantiated and without merit.”
A rep for the singer could not be reached for comment. Maverick and Warner Music both declined to comment, pending litigation.
Maverick’s legal salvo came in rapid response to Warner filing a sealed lawsuit in Delaware on Wednesday, seeking a judge’s declaration that it had fulfilled its duties under the partnership and to consider any such claims by Maverick as groundless.
Maverick’s attorney, Bert Fields, however fired back saying Madonna and her associates’ claims were justified.
“For months, we tried to settle these disputes without litigation, and we tried over and over and over without success and when we told Warner Music that we were at the end of the rope and about to file a lawsuit in California, they went into court in Delaware and filed there,” Fields told Los Angeles’ City News Service.
Maverick’s suit alleges Warner failed to live up to its end of the bargain by not covering “guaranteed” expenses such as radio advertising and other promotions to support Maverick-signed artists.
Court papers also assert sales from its roster has generated over $900 million for Warner with $100 million of that profit not adequately accounted for.
Fields said that Madonna and company are asking for an estimated $200 million in unspecified compensatory and punitive damages as a result of Warner Music’s allegedly shoddy accounting and he’s confident they’ll succeed.
“I believe a Delaware court will dismiss that suit,” he added.
When she’s not busy running her business empire, writing best-selling children’s books, smooching Britney, or studying Kabbalah, Madonna is planning to hit the road again, kicking off her Re-Invention Tour on May 24 in Los Angeles.
The trek, in support of her latest disc, American Life, will play dates in North America before heading over to Europe and Israel.