Hipgnosis Songs Fund Takes Legal Action ‘To Secure An Indemnity from Merck Mercuriadis’ As Liquidator-Levied Lawsuit Ramps Up

Another day, another round of Hipgnosis drama: The openly traded tunes fund is looking for “complete indemnity” after being called in a claim from the liquidators of a long-defunct Hipgnosis service established by Merck Mercuriadis.

Hipgnosis Songs Fund (HSF), including a revamped board and working to bring in a possible third-party purchaser for its music IP, today revealed the official indemnity push. As lots of understand, HSF and its “financial investment advisor,” Blackstone-powered Hipgnosis Song Management (HSM), have for a long time been involved in a heated conflict.

That face-offsustained by aspects consisting of a debt-necessitated acquisitions stop, a severely drooping share cost, and the regards to HSF’s arrangement with HSM, caused a vote versus HSF’s extension in October of 2023. There’s presently a late-April due date for the operation’s Robert Naylor-led board to formally propose a prepare for the future– for this reason the aforementioned effort to charm a non-Hipgnosis purchaser.

Less commonly understood (or a minimum of gone over) is the claim imposed versus HSF, HSM, and Mercuriadis alike over a predecessor entity called Hipgnosis Music Limited (HML).

We’ve currently covered the case and the complicated chain of occasions that set it in movementMentioned briefly, Mercuriadis was (or is, as Hipgnosis Songs Fund sees it) an HML director together with a specific later founded guilty and sentenced to jail for his function in an enormous pensions plan.

HML was ended up in February of 2018 with millions owed to financial institutions, and the formerly kept in mind liquidators officially served the accuseds with the problem in November of 2023, following a prolonged examination. Central to the match is a supposed breach of fiduciary task and a diversion of specific organization chances from the shuttered HML and to its name followers, according to reports.

On February 5th, only days after Mercuriadis stepped down as CEO of HSM in favor of a most likely more unnoticeable post as chairman, HSF in a release stated it had actually employed its own counsel. Divulged were the tunes fund’s strategies to “look for to protect an indemnity from” Mercuriadis and HSM “versus any liability that may be sustained” as an outcome of their supposed actions.

Now, according to HSF’s February 19th release on the topic, HSM and Mercuriadis”declined to indemnify” it “versus liabilities which might occur from” the veteran music supervisor’s “declared misbehavior.”

“The Company is worried,” Hipgnosis Songs Fund continued, “having actually been ensured by Mr Mercuriadis and the Investment Adviser that these claims lack benefit which they plan to intensely safeguard them, that the ask for an indemnity was declined.”

HSF “is not guaranteed as to the expenses of this claim,” per the text, and is poised to “look for a complete indemnity” by means of a Part 20 High Court claim versus Hipgnosis Song Management.

Needless to state, it’ll deserve carefully following the suit and its ramifications for the future of the HSF-HSM tie-up, which, if current occasions and financiers’ well-defined positions are any indicator, will show exceptionally tough to restore. And while the subject typically takes a rear seat in always comprehensive descriptions of the legend, the fate of the tunes fund’s lots of important brochures is up in the air as an outcome.