Blues label claims contract breach, fraud, more.

Blues label Fat Possum Records and its owner Matthew Johnson have sued former joint-venture partner Epitaph Records, alleging that Epitaph hatched "a malicious plot ... to financially destroy Johnson and Fat Possum."

The suit, filed Tuesday in California Superior Court in L.A., charges Epitaph with breach of contract, breach of fiduciary duty, fraud, interference with contractual relations and a host of other abuses.

According to the suit, Oxford, Miss.-based Fat Possum -- home to R.L. Burnside, Junior Kimbrough and other contemporary bluesmen -- was being funded by L.A.-based Epitaph under the terms of a joint-venture agreement reached in July 1997. From that time until 2003, Fat Possum operated at a loss.

However, the action maintains that in October 2003, as it appeared Fat Possum was about to move into profitability, Epitaph told the label it would no longer fund operations or pay Johnson's salary.

The suit maintains that under financial duress, Johnson agreed to buy back Epitaph's interest in Fat Possum for an unstated price. The action claims that after Epitaph increased pressure on Johnson by delaying the signing of the redemption agreement, it was amended to add $50,000 to the redemption price.

It also alleges that under further pressure from Epitaph, Fat Possum gave up rights to distribute Solomon Burke's successful 2002 album and the forthcoming album by the Black Keys. Fat Possum also claims that immediately before the effective redemption date of June 1, 2004, Epitaph instructed its distributors in the U.S. and abroad to sell off Fat Possum product at "fire sale" prices. It alleges that product returned to Fat Possum by Epitaph and its distributor, Koch, was far short of the amounts stated by those companies in inventories conducted in early June.

Fat Possum seeks damages in an amount to be determined.

Epitaph president Andy Kaulkin could not be reached for comment.

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