Hives frontman Nicholaus Arson has issued a statement on the band's Web site claiming its contract with Burning Heart Records/Epitaph had expired, therefore leaving the group free to sign a worldwide

Hives frontman Nicholaus Arson has issued a statement on the band's official Web site claiming its contract with Burning Heart Records/Epitaph had expired, therefore leaving the group free to sign a worldwide deal last month with Universal Music U.K. The deal, which was rumored to be worth more than $11 million, was initiated by Universal Music U.K. chairman Lucian Grainge and has left Burning Heart/Epitaph "exploring legal options" for alleged breach of contract.

"We have for some time now had extremely serious issues with the BHR/Epitaph label and as a consequence we recently decided not to continue with the label we have been working with for seven years," Arson said. "BHR/Epitaph has all along been aware of the seriousness of these matters so that we eventually left them is not a shock to anyone. They have also all along been very well aware of why we are free to sign a new deal with whoever we want. BHR/Epitaph did not have the rights to our third album."

The Hives have released two albums through Burning Heart and its 51% U.S. stakeholder Epitaph: 1997's "Barely Legal" and 1999's "Veni, Vidi, Vicious." Last October, U.K. indie Poptones licensed the act for that territory and released the compilation "Your New Favourite Band," which has gone platinum. This March, Warner Bros. licensed "Veni, Vidi, Vicious" for North America but lost out in a subsequent bidding war for the band. That version of the set has sold 223,000 copies in the U.S., according to Nielsen SoundScan; the single "Hate To Say I Told You So" is No. 6 on Billboard's Modern Rock Tracks tally.

Burning Heart managing director Peter Ahlqvist refused to comment further than reiterating a July 30 statement, where he said: "Burning Heart controls the exclusive worldwide rights to the Hives' next studio album. The Hives have always been fully aware of their commitment to Burning Heart. In the circumstances we have no choice but to vigorously protect our rights. Our lawyers are currently looking into the matter."

A Universal spokesperson also refused to comment on "any disagreement between the band and their previous label" but a statement released last month by the company said a new Hives album was slated for release in 2003 "by Universal companies around the world."