Earache Records And Century Media Engage In Legal Battle

Friday, 28th March 2014

According to the Courthouse News Service, and first reported by Blabbermouth, British metal label Earache Records has filed a lawsuit against New York-based The Century Family, an affiliate of the nonparty record label Century Media Records, of Dortmund, Germany, claiming that the U.S. distributor owes it $250,000 in licensing fees, and broke a promise to release a catalog of hundreds of albums.

Earache claims that The Century Family breached a January 2013 agreement to market and distribute Earache’s music, and attempted to escape its obligations by falsely claiming Earache had breached a three-year licensing agreement. Earache claims that of the 356 albums it delivered to Century, including 10 new releases, the company has distributed only 13 albums in the United States.

Excerpt from the complaint:

“On December 10, 2013, Don Robertson of [The Century Family] asked Al Dawson of Earache Records whether Earache Records would give [The Century Family] a six-month extension of its obligation to pay the $125,000.00 advance due February 1, 2014, because [The Century Family], according to Robertson, was having cash-flow problems. Mr. Dawson explained that, for reasons of its own (including among other things imminent obligations of Earache Records to third parties, for payment of which Earache Records was depending on timely payment of [The Century Family’s] second and third advances under the U.S. Licensing Agreement), Earache Records regretfully could not agree to [The Century Family’s] request.

“On January 31, 2014, less than one day before [The Century Family’s] deadline to make its second $125,000 advance payment, Earache Records received a letter from attorney Eric German, characterizing himself as ‘litigation counsel’ for [The Century Family], setting forth a list of spurious allegations, on the basis of which [The Century Family] was claiming (for the first time ever) that Earache Records was supposedly ‘in breach’ of the U.S. Licensing Agreement. That this letter sent on behalf of [The Century Family] was nothing but a transparent pretext for delay was made clear when Mr. German therein advised, after first threatening litigation, that ‘[The Century Family] will not be making any payment pursuant to [the January 2013 agreement], unless and until such time as this matter is resolved, whether by negotiated settlement or by litigation.’ [The Century Family] thereby not only announced its intended breach of its obligation to make the $125,000.00 February 1, 2014, advance payment, but also the $125,000.00 March 1, 2014, advance payment.

“On February 7, 2104, counsel for Earache Records, William Leibowitz, responded in writing to Mr. German’s letter of January 31, 2014, stating in detail Earache Records’ position and factual contentions, and noting [The Century Family’s] actual and anticipatory breach of the U.S. Licensing Agreement’s payment provisions. Mr. Leibowitz’s letter constituted notice of termination of the U.S. Licensing Agreement, pursuant to its terms.

“[The Century Family] did not timely make the $125,000.00 February 1, 2014, advance payment, and has failed to cure that default of [The Century Family’s] contractual obligation. [The Century Family] has also now failed to make the $125,000.00 March 1, 2014, advance payment, and has already stated that it has no intention to cure that default, either. Accordingly, as of at least March 9, 2014, [The Century Family] is in material breach of its payment obligations under the U.S. Licensing Agreement. Moreover, by [The Century Family] having failed to cure such breaches within thirty (30) days of the date of Mr. Leibowitz’s letter of February 7, 2014, the U.S. Licensing Agreement is deemed terminated effective as of March 9, 2014.”

Earache says The Century Family is still marketing and selling Earache’s records in the U.S. market.