Legal Roundup: Global Eagle Agrees to Massive UMG Payout; Kesha Drops Abuse From Case in NY
After suffering a big defeat in a tricky copyright infringement case concerning the performance of sound recordings, Global Eagle Entertainment has agreed to a massive pay-out to Universal Music.
In April, a federal judge ruled on summary judgment that one of Global Eagle's subsidiaries acted willfully in collecting money from airlines for copyright licenses but failing to ultimately arrive at an agreement so that songs from The Beatles and other artists could be distributed to those traveling on American Airlines. The ruling set up a damages trial with some 4,500 works in contention, but that won't happen.
On Friday, Global Eagle announced the terms of a settlement deal.
According to a filing with the SEC, the company will be immediately giving Universal Music $15 million in cash plus 1,360,544 shares of its common stock, currently worth about $9 per share. Additionally, Global Eagle will make another $5 million cash payment next March and if the company's stock price vaults past $10 a share, it will be sending Universal another 500,000 shares. If the company's stock price reaches $12 a share, Universal gets an additional 400,000 shares.
That puts the overall deal worth about $30-40 million.
In other entertainment law news:
-- Kesha's legal retreat continues. She's already pulled back on her California lawsuit against Dr. Luke. Facing the producer's claims of having breached her contract and having experienced a loss of most of her counterclaims (now the subject of appeal), Kesha confirmed to a New York judge on Friday that she will not be relying on alleged abuse as a defense to Luke's assertion she violated contract.
-- The dispute among insurers and Walmart over a settlement payout to Tracy Morgan and a couple others involved in a July 7, 2014 auto crash is ongoing. Last week, a judge held a conference with the parties, and afterwards, Ohio Casualty Insurance Company filed an amended complaint. The latest version maintains that had Wal-Mart done an "adequate and reasonable" investigation of Morgan’s condition before settling in late May 2015, it would have learned that the comedian's condition was "either incorrect, unsubstantiated and/or overblown." By our estimates based on court documents, $90 million was paid out to Morgan and comedian Ardie Fuqua. The insurance company believes this was too much. What would Walmart have learned about Morgan with a supposedly better investigation? According to the plaintiff, "Within weeks of Wal-Mart settling with Morgan, Morgan was seen driving one of the most powerful sports cars in midtown Manhattan, driving without any difficulty and clearly showing he was enjoying himself."
This article was originally published by The Hollywood Reporter.