Hipgnosis Songs Fund (HSF), its funding adviser, and founder Merck Mercuriadis have formally been served with a lawsuit stemming from the latter’s long-defunct Hipgnosis Music Restricted (HML) operation.
HSF disclosed this newest litigation-related improvement in a not too long ago revealed launch that touched upon a number of matters. We first reported on the courtroom confrontation again in July, when Hipgnosis stated it’d “grow to be conscious” of the Excessive Court docket grievance.
However the publicly traded songs fund additional maintained it was at midnight in regards to the specifics of the motion, which, in keeping with execs, hadn’t but been served. At roughly the identical time, UK-based retailers together with the Telegraph indicated that the go well with had been filed by liquidators of the aforesaid Hipgnosis Music Restricted.
Based in 2015 by Mercuriadis and Swedish businessman Afram Gergeo, HML upon winding up in 2018 owed roughly $4.54 million (£3.6 million) to collectors, per the famous supply.
Whereas the identical outlet didn’t dive into the concerned claims’ particulars, it did spotlight that the purported misconduct involved an alleged breach of fiduciary responsibility. (Additionally talked about was that Gergeo had subsequently been “imprisoned for his position in an elaborate Maltese pension scheme fraud that misplaced hundreds of thousands of kilos of savers’ cash.”)
Now, 4 months and alter later, Hipgnosis Songs Fund, Blackstone-powered Hipgnosis Music Administration (HSM), and Mercuriadis alike have been served with the grievance.
As described by HSF, “Hipgnosis Music Restricted alleges a diversion of enterprise alternative from Hipgnosis Music Restricted (of which Mr Mercuriadis was beforehand a director)” to the related (and newer) Hipgnosis entities. Moreover, HSF is claimed to have “unlawfully assisted…Mercuriadis with, or acquired, this alleged diversion.”
Predictably, the longtime music supervisor, HSM, and HSF “deny such claims and intend to vigorously defend them.” Hipgnosis Songs Fund, it was made clear for good measure, “isn’t insured as to the prices of coping with this declare.”
Moreover this info, concrete particulars in regards to the go well with stay comparatively few and much between; neither HML itself nor its liquidators appeared to have commented publicly on the topic on the time of writing. Although HSF’s remarks on the matter appear restricted to these described above, the troubled fund is individually within the technique of appointing a brand new auditor and executing a strategic assessment.
Within the absence of an investor-approved deadline extension, stated strategic assessment is anticipated to conclude with the announcement of a associated roadmap on April twenty sixth, 2024 on the newest, or six months after HSF shareholders voted in opposition to the fund’s continuation. Throughout at this time’s buying and selling hours, HSF inventory (LON: SONG) slipped by 2.2 p.c to complete at 69 pence per share.