According to reports SFX Entertainment has now settled one of the two outstanding lawsuits against it. The suit involved allegations of a stolen idea.
Last August, SFX brainchild Robert Sillerman was accused of fraud and breach of contract, which resulted in a class action lawsuit. Paolo Moreno of Disco Donnie Presents filed the legal case, claiming that he came up with the original concept for SFX. Two others claimed that Sillerman had cut them out of the business once the company began to take off.
Initially, Moreno’s claims of fraud and breach of contract had been moved forward to trial by a California judge of the California, due to email evidence that confirmed Moreno’s involvement in the SFX partnership early on. However, despite the credible claims, the class action has now been settled according to documents obtained by Mixmag.
That removes one giant weight off of SFX’s shoulders, thought the EDM promoter still faces a completely separate suit. This second case seeks compensation for allegedly misleading investors in Sillerman’s bid to take the company private. The lawsuit refers to the acquisition proposal as a “sham process” designed to make the firm attractive to a third-party purchaser and maintain the share price before liquidity problems became apparent.
SFX hasn’t had the best luck recently, with bankruptcy and lawsuits dominating the day-to-day. But the troubled firm has also secured $20 million in new financing, thanks to help from Canadian private equity firm Catalyst Capital Group. The new financing has reportedly boosted company shares by 57%, albeit from distressed lows.