Universal Music Group: Original Masters for 'Many of the Artists' Named in Class Action Were Not Lost in Fire

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Firefighters battle a fire on the backlot of Universal Studios on June 1, 2008 in Universal City, Calif. 

Hole has dropped out of the lawsuit because UMG assured them the band's music was not effected by the blaze.

Hole has dropped out of a class action lawsuit against Universal Music Group after accepting that their masters were not affected by the 2008 fire that reportedly destroyed up to 500,000 master recordings in the record company's archive vaults. 

An amended putative class action complaint against UMG was filed Aug. 16 that left off Hole. However, the other original named plaintiffs --  Soundgarden, Tom Whalley on behalf of the Afeni Shakur Trust that oversees Tupac Shakur's estate, Tom Petty's ex-wife Jane Petty and Steve Earle -- that filed their lawsuit June 21 against UMG are still pursing their claims. 

The plaintiffs are seeking to recover half of any settlement proceeds and insurance payments received by UMG and half of any remaining loss of value not compensated by such settlement proceeds and insurance payments. According to the lawsuit, UMG's litigation and insurance claims following the fire were reportedly valued at $150 million to recoup the value of the master recordings -- none of which was directly shared with artists. The artists are suing UMG for breach of contract, negligence, reckless conduct, misrepresentation as well as other causes of action.

After Hole dropped out, UMG released a statement accusing the attorneys filing the complaint of rushing into litigation without first knowing exactly which client's archives were effected. News of the warehouse fire came to light after the New York Times Magazine published on an investigative story titled "The Day the Music Burned" on June 11. 

"Over a month ago, without even knowing if the 2008 fire on the NBC/Universal Studios lot affected their clients, plaintiffs' attorneys rushed to pursue meritless legal claims," said a UMG spokesperson in a statement. "UMG's dedicated global team is actively working directly with our artists and their representatives to provide accurate information concerning the assets we have and what might have been lost in the fire. Even though our work is not yet complete, we have already determined that original masters for many of the artists named in the lawsuit were not lost in the 2008 fire. We will not be distracted from our focus on providing our artists with full transparency even as the plaintiffs' attorneys continue to pursue these baseless claims."

Attorneys for the musicians said they agreed to drop Hole because UMG assured them the band's music was not effected. 

"Hole was dropped because UMG is adamant that no Hole master recordings were lost," said Ed McPherson, one of attorneys representing the named musicians. "We agreed to drop Hole from the suit pending confirmation of the non-loss."

While Hole is no longer a party to the case, the remaining artists show no signs of dropping their lawsuit against UMG. Instead, they have brought additional claims of negligence, reckless conduct and conversion in their lawsuit. They are also now accusing UMG of misrepresentation by omission accusing them of concealing that the measures they were taking to protect and preserve their masters were insufficient. They alleged that UMG did not tell them that their "musical works would be stored in an inadequate and substandard, non-fireproof, storage warehouse located on the back-lot of Universal Studios, which was a well known firetrap."

McPherson said the claim was added because "if UMG was going to store invaluable multi-track master recordings -- the lifeblood and legacy of its artists -- in what UMG refers to as "the vault," but in reality was a warehouse, which was not fireproof (or anything proof), it had a duty to inform its artists of that when they signed their recording agreements (and thereafter)."

McPherson continued, "Money is money, but, if UMG had said to its artists: 'Hey, we will pay you C amount of dollars to sign this record deal, but the irreplaceable multi-track master recordings that you will create may very well be irreparably destroyed because we will not bother to protect them in the slightest possible way,' I imagine that not that many artists would have signed with UMG."


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