ABS Entertainment, Barnaby Records, Brunswick Record and Malaco (collectively, “Copyright Owners”) filed with the U.S. Bankruptcy Court an objection to Cumulus Media’s First Amended Joint Plan of Reorganization.
The objection asserts, “The Copyright Owners have exclusive ownership rights to certain sound recordings of legendary artists such as Al Green, Willie Mitchell, Otis Clay, the Crickets, Eddie Hodges, Jimmy Buffett, Ray Stevens, the Everly Brothers, Gene Chandler, The Artistics, Rev. James Cleveland, and many more. The Debtors have not obtained performance rights licenses or paid public performance royalties to the Copyright Owners for the subset of recordings initially fixed (i.e., recorded) prior to February 15, 1972 (the ‘Pre-1972 Recordings’). Nevertheless, in violation of applicable California law, the Debtors exploit the Pre-1972 Recordings for profit.”
In addition, “The violations of California law will continue after the Plan’s effective date, as the Debtors’ entire business model is predicated on transmitting, copying, performing, broadcasting, and streaming the Pre-1972 Recordings for which the Debtors do not have performance rights licenses and do not pay public performance royalties. Thus, the Plan is to be implemented by means forbidden by law and may not be confirmed. In addition, the Plan is predicated on acts that violate applicable law and therefore is infeasible. Similarly, the economic projections that purport to establish the Plan’s feasibility fail to account for this illegality. As a result, the Debtors failed to meet their burden as to feasibility, and the Plan may not be confirmed.”
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