Sale of classical music label assets approved
By JOSHUA HURWIT, Staff writer
First published: Thursday, May 19, 2005
ALBANY -- A bankruptcy judge Wednesday endorsed a plan to sell assets of a Troy-based independent classical music recording label to a Virginia company for $197,500. The agreement was struck after months of litigation and hours of arguments in the U.S. Bankruptcy Court in Albany, the venue for the Chapter 11 case of The Dorian Group Ltd.
The label agreed to negotiate the sale with Sono Luminus, a studio based in Upperville, Va., which bid $135,000 for the Dorian catalog and recording equipment and $62,500 for the inventory in Dorian's warehouse on Brunswick Road in Troy. The catalog includes recordings, contracts and copyrights.
But Judge Robert E. Littlefield Jr. acknowledged that several issues remain, including liens from creditors and bids from artists seeking to reclaim master recordings. That, lawyers say, could complicate the transaction between Dorian and Sono Luminus.
"I'm not terribly comfortable with the status of things," Littlefield said.
Also Wednesday, the judge approved a deal granting ownership of a Dorian subsidiary to a New York City firm. For $75,000, Koch Entertainment Distribution LLC acquired title to Reference Recordings LLC.
Dorian acquired California-based Reference Recordings in a 2003 buyout and formed Reference Recordings LLC as a subsidiary, which filed for Chapter 11 protection on March 14. Chapter 11 allows the debtor to reorganize while shielded from creditors.
The former owners of Reference had sued to reclaim the company. Their attorney, Richard L. Weisz, said the sale is beneficial to his clients. "From our point of view, it means we'll be dealing with Koch," he said.
The agreements pleased Hans-Friedrich Hell and his attorney. They had previously sought an order from the court voiding Dorian's rights to an album produced by Hell's 19-year-old son, Felix, acquired in the Reference buyout.
Littlefield granted a request from Eric J. Snyder, the Hells' attorney, to nullify the contract and allow the Hells to buy back their rights to "Organ Sensation" for $250.
In a telephone interview with the Times Union last week, Hans-Friedrich Hell claimed that Dorian's failure to live up to its end of the bargain -- promoting the CD, providing production details, paying royalties -- jeopardized Felix's career.
"It has hurt our plan for at least the next two or three CD projects because this is really a CD that is heavily in demand," Hans-Friedrich Hell said. "We don't know what the production was ... 3,000, 5,000, 10,000? We have not a hint of a clue, and that of course made us relatively mad. We really spent time and effort to make this CD."
Despite the deal, there remains a disagreement between both sides: The Hells' contend they're owed royalties from Dorian, while Dorian claims the company is owed money by the Hells.
Lawyers for Dorian and Sono Luminus are expected to return to court June 7.
