Phillips is a longtime veteran and former AEG Live CEO who has promoted tours for Bon Jovi, Justin Bieber, Kanye West, The Rolling Stones and Prince.
Loeffler is a longtime music manager, touring executive and film producer who directed Why Dont We’s 2019 film, Unbelievable.
Why Don’t We formed in September 2016, with the band's business set up as two manager-managed LLCs, Signature Entertainment and PDM III, with ownership stakes for all five group members. The LLCs would retain the rights to manage all aspects of the group and its individual members' careers and own their creative output, while categorizing the five members as salaried employees, according to the management agreement each member signed. The LLCs also fund and exclusively manage solo artist EBEN.
The next year, Phillips relinquished his role managing one of the LLCs, Signature Entertainment, in order to accept a job running LiveStyle, the company that emerged out of EDM promoter SFX's bankruptcy. Phillips returned to manage Why Don't We in 2020 and says Loeffler “abnegated his prior agreement to allow Plaintiff to reassume the role of manager [of Signature Entertainment],” according to a lawsuit filed against Loeffler on Thursday in Los Angeles Superior Court.
Phillips wants a judge to expel Loeffler from PDM III and hand control back to Phillips in a legal process known as disassociation, in which a judge orders the termination of a manager’s voting rights if the manager is found to have acted improperly or “willfully (and) persistently committed” a significant “material breach” of the entity’s financial interest.
In his complaint, Loeffler is suing all five Why Don’t We members for anticipatory breach of contract and suing Phillips for tortious interference with a business relationship over the band’s refusal to sign the Atlantic deal. He is seeking damages. “Signature has the exclusive right to ‘advise, counsel, direct, and assist’” each band member “in connection with all matters relating to their careers in all branches of the entertainment industry,” writes Loeffler’s attorney, Michael R Levin of Baker Law, in the complaint, which was filed in Orange County Circuit Court in Orlando, Florida. No hearing has yet been scheduled in that case.
Loeffler told Billboard in a statement that Phillips' suit is "without merit and in retaliation for the suit we filed against him." He added, "The allegations now being made by Mr. Phillips have no merit and will be debunked in court.”
Phillips' lawsuit also claims Loeffler abused members of Why Don’t We and “irreparably damaged” the management company he and Phillips had created to help foster the up-and-coming boy band’s career.
Hollywood attorney and litigator Howard King of Los Angeles-based law firm King, Holmes, Paterno & Soriano is representing Phillips and alleges in the complaint that while “Loeffler was living with [the band] at a rental property that had been secured for them to develop music” he engaged in “nightmarish behavior,” including “ daily verbal abuse, screaming at them at the top of his lungs, sometimes for 10-20 minutes,” and reportedly “forced the five members to share two small bedrooms, even though the house had a spare, unused bedroom that was upstairs.”
The suit also claims Loeffler would monitor “almost every movement they made” and “hardly allow them to leave the house. Loeffler did not allow them to have friends or visitors, did not feed them properly, and each night set a house alarm, which they did not know the code to, to make sure they did not leave.”
Attorney and trial lawyer Alan Gutman of Gutman Law is representing the band and its individual members, all of whom started working with Loeffler when they were minors.
“My clients, the artists known as Why Don’t We, support Randy Phillips the ‘same way he has supported us from the start of our careers,’” Gutman said in a statement, quoting the band.
King said the decision to terminate Phillips shocked the band and argues that the loss of the record contract is Loeffler’s fault and “severely tarnished Signature and PDM III’s most valuable assets (its relationship with Why Don’t We and Eben), possibly beyond repair.”
“After years of mental and financial abuse at the hands of Dave Loeffler and his associates, Randy Phillips seeks to salvage a deteriorating relationship with rising stars Why Don’t We and Eben with the production companies co-owned by Phillips,” King told Billboard in a statement. “Loeffler’s mistreatment of these primary assets of the companies gravely endanger the survival of the companies. For unknown motives, other than perhaps professional jealousy, Loeffler has attempted to interfere with Phillips's role as primary manager of these artists.”
Phillips also accuses Loeffler of holding up the release of the band’s second album, The Good Times and the Bad Ones, until January 2021, when it was released in a licensing deal with Atlantic. Phillips claims Loeffler hired an unqualified friend to produce the album, despite his lack of experience, and assigned the friend 30% of the record’s publishing royalties. Phillips also accuses Loeffler of withholding a $1 million publishing advance intended for members of Why Don’t We during the pandemic.
In addition to stripping Loeffler of his manager title at PMI III, King is asking a judge to establish “further relief as the Court deems just and proper.”