2008 Universal Vault Fire Stirs Up Lawsuits, Valuation Concerns

Litigation over the Universal Studios fire that reportedly destroyed up to 500,000 master recordings could be filed on behalf of affected artists as early as next week, according to attorney Howard King of the Los Angeles-based firm King, Holmes, Paterno & Soriano.

“We’re confident we can have all of the plaintiffs lined up by next week, and we have the fantasy that we could actually get it on file next week,” King said. “But I think the reality is, it might take a little longer to get the right complaints prepared.”

An extensive report published this week in The New York Times Magazine alleged that a fire that broke out on a Universal backlot in June 2008 destroyed master recordings spanning decades of popular music from icons including Elton John, Billie Holiday, Nirvana, Chuck Berry, Judy Garland, R.E.M., Tupac Shakur and Janet Jackson, among other prominent artists whose recordings were owned and stored by Universal Music Group (UMG).

French parent Vivendi SA has decided to place 50% of the company up for sale with a valuation of around $30 billion. There have been fewer interested suitors than anticipated according to insider accounts, and the negotiations have gone slowly.

The problem for Universal that so much of its valuation comes not only from its music publishing, which remains unaffected, but from its music catalog. 

King declined to name specific artists who have reached out to his firm regarding possible representation, stating only that they include a mix of existing and new clients. Despite the large number of artists affected, he said he will not be filing a class action suit due to the excessive amount of potential damages involved.

Source: Forbes