Lawyers representing a number of major artists have filed a class-action lawsuit against Universal Music Group over a 2008 fire in which hundreds of thousands of master tapes — including the life's work of many artists — are believed to have been destroyed.
The lawsuit alleges this was done to spare Universal public embarrassment and so the record company could keep the $150 million of insurance money it received and not share it with aggrieved artists.
Many artists whose catalogs were supposedly stored in the Universal warehouse later said they had no knowledge that their masters may have been damaged or destroyed and were never contacted by Universal regarding the matter.
UMG disputed the findings of the NY Times Magazine report as containing "numerous inaccuracies." But CEO Lucian Grainge later followed up with an internal memo (obtained by the Los Angeles Times) to the company, saying the label owed its artists and their estates "transparency" over the vault fire losses.
Grainge added that Universal had created a team specifically tasked with responding to artist concerns.
Finding the truth about what was lost in the fire will likely be the first order of business as the lawsuit advances. The legal papers call for "50% of any settlement proceeds and insurance payments received by UMG for the loss of the Master Recordings, and 50% of any remaining loss of value not compensated by such settlement proceeds."
The initial New York Times Magazine report suggests that Universal has detailed logs of what was burned in the fire, which it would have had to do to make an insurance claim following the blaze.
The lawsuit also alleges UMG stored the priceless master tapes in "a known firetrap," didn't properly protect the recordings and didn't take "all reasonable steps" to make sure the tapes were safe and secure in the vault. It also takes Universal to task for not reporting the losses to the artists whose work was affected, and holds up the company's public statements at the time as proof UMG "concealed the loss with false public statements."
In the immediate aftermath of the fire, one Universal spokesperson was quoted as saying, regarding the damage, "in a sense, nothing was lost."
The suit will likely come down to the question of who actually owns the lost master tapes?
Many recording contracts specify that the master is owned by the record company. Even in cases when copyright reverts back to the artist after a certain period, the master tape remains in the property of the record company.
The lawsuit appears to address this question, suggesting that there is a "contractual entitlement" to 50% of any payments made to UMG as reparation for the loss.
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