Renowned singer-songwriter Barry Manilow, along with Stiletto Entertainment based in Nevada, has taken legal action by filing a lawsuit in the U.S. District Court in California. The lawsuit, which seeks $1.5 million in unpaid bonus funds, revolves around a dispute related to the sale of Manilow's catalog to Hipgnosis Songs Fund in 2020.

Variety reports that the lawsuit alleges breach of contract, fraud and fraudulent misrepresentation, and negligent misrepresentation. According to the legal documents, the bonuses were reportedly due as part of the acquisition agreement between Manilow and Hipgnosis. It is worth noting that Hipgnosis had previously sued Manilow under similar terms, accusing him of breach of contract.

A representative from Hipgnosis explained that the disagreement stemmed from varying interpretations of certain clauses in the sale agreement regarding bonus payments. In a statement to the Financial Times, the representative stated that discussions with Manilow's representatives highlighted a difference in understanding.

The lawsuit, humorously identifying the plaintiff as "Barry Manilow writes the songs that make the whole world sing," outlines the terms of the catalog sale. It states that the initial purchase price of $7,500,000 was augmented by additional payments of $750,000 based on the cash income received by Hipgnosis from the assets. These additional payments were contingent on the income increasing by at least ten percent year-on-year for each of the first three and four years after the purchase, respectively.

The lawsuit contends that Manilow's songs met the criteria for receiving the two additional $750,000 purchase price payments, as the income received by Hipgnosis ranged from $404,388 to $550,383 during each of those years.

The legal document also claims that Hipgnosis made promises to Manilow and Stiletto Entertainment, pledging to pursue album reissues, special compilations, and various licensing agreements in commercials, films, television, and other media. This was allegedly done by leveraging the company's expertise and experienced staff. However, the lawsuit alleges that none of these promised marketing and promotion efforts came to fruition. Furthermore, it states that Hipgnosis failed to consult with Manilow or employ a dedicated team of qualified industry professionals to maximize the value of the purchased royalties.

Hipgnosis, launched in 2018, made waves in the music industry by acquiring song catalogs from esteemed artists such as Neil Young, the Red Hot Chili Peppers, and Shakira, among others. However, the company's ambitious plans seemingly exceeded its ability to deliver on its commitments. After facing plummeting stock values, a shareholder revolt, and the subsequent acquisition by Blackstone-owned Lyra Bidco Limited, founder Merck Mercuriadis stepped down from his position in July.

As the legal battle between Barry Manilow, Stiletto Entertainment, and Hipgnosis unfolds, the music industry eagerly awaits the resolution of this dispute and its potential implications for the future of catalog sales and artist agreements.