20 January 2009
deathrow sold out!!!
The assets of Death Row Records, said to include master recordings of Tupac Shakur, Snoop Dogg and Dr. Dre, were auctioned yesterday (Jan. 15) for $18 million to Canadian development company WIDEawake Entertainment Group.
Because of the less-than-expected acquisition price, the only creditor likely to capture a return after lawyers and other Chapter 11 administrative fees are paid is the Internal Revenue Service.
That means other creditors, including unsecured ones like co-founder Lydia Harris, will be left out in the cold. Harris isn't content with the verdict.
"This was all a scam from the beginning," a disgruntled Harris tells Billboard. "Everyone wanted me to bring judgment down, and so I brought on the case. But now I'm not getting paid because I'm an unsecured creditor? Yet, administrators are getting paid and Suge [Knight]'s bills are still getting paid? If it wasn't for me no one would be getting money. They made sure it happened this way because I was the biggest creditor. There must be some internal thing going on and I'm obviously not in on it."
According to Harris, Conquest Media, an online marketing and branding company, made an undisclosed bid yesterday, but the judge overruled it because it wasn't filed on time.
As previously reported, Death Row initially filed for Chapter 11 protection in April 2006, and that July, the California judge overseeing the filing ordered a bankruptcy trustee to take over the label. Along the way, three companies put bids in on Death Row, all three valued at about $25 million. But the first two -- stalking horse Warner Music Group and its replacement Koch Entertainment -- both pulled out when due diligence showed that inadequate record-keeping made it difficult to ascertain the label's valuation, let alone whether it was worth the $25 million bid both had made.
An investment group called Global Music agreed to buy Death Row in June 2007, but that deal collapsed amid fighting between investors, who ultimately were unable to raise the necessary financing.
Harris battled Knight for years for a share of Death Row and won a $107 million judgment in 2005, which was one of the factors that tipped the label into Chapter 11.
WIDEawake Entertainment Group Inc., based in Toronto, has had nominal exposure to the U.S. market. Lara Lavi, the company's founder and CEO, is a lawyer, songwriter and entrepreneu, who founded the company in 2006 to work in a variety of media, including film and music. WIDEawake has distribution in Canada through Universal Music.
Lavi says WIDEawake does not have distribution in the U.S. and has not determined which company it will partner with to distribute the Death Row catalog.
"We have some ideas," she says, adding that the label has been in contact with companies in the U.S. about potential distribution. "We're very respectful of Death Row's legacy and when the time is right we'll announce that."
Lavi acknowledged there is significant unreleased material included in the deal, including tracks by Shakur, Dr. Dre and others. "There's probably more that hasn't seen the light of day than has," she says. Lavi says announcements on the unreleased material are forthcoming. In the case of the Shakur material, the company will work closely with his estate.
Lavi would not disclose who WIDEawake's investors are, other than to say the company has financing to secure the Death Row deal. She says the value of the acquisition makes sense considering "it is a clear deal. There's no debt to worry about." WIDEawake lists its investors as Mississauga, Ont.-based New Solutions Capital.
Lavi says she is unconcerned about any potential involvement of Knight, the label's co-founder. "He's moved on," she says, noting he has started a new label.
For her part, Harris also recently launched an independent label, Lady Boss Entertainment, which she had planned to continue funding with the money she hoped she'd be awarded in the settlement. Now, Harris says she's looking for investors to "make it what Death Row was supposed to be. I need people who believe in me."
"My head is spinning right now. I feel like a victim," says Harris. "They took all this time and tried to attack me, now there's no money for unsecured creditors. Now I wonder if it was all worth it. But I'm definitely not giving up. I never thought I would end up with anything. I'm going to keep pushing."
Reporting by Mariel Concepcion, Ed Christman and Robert Thompson.
from the stranger.com