Hipgnosis Songs Hit: Struggling music royalty fund, Hipgnosis Songs, is now entangled in legal proceedings, with allegations of a “diversion of business opportunity” directed at the company, its founder Merck Mercuriadis, and its investment adviser.
The legal action, served by Hipgnosis Music Limited (HML), a company where Mercuriadis was previously a director and creditor, contends that there was a “diversion of business opportunity” from HML to the London-listed fund and Hipgnosis Song Management (HSM), the investment adviser also founded by Mercuriadis.
Mercuriadis, HSM, and the London-listed fund have all denied the claims and expressed their intention to defend against them. Notably, the fund highlighted that it is not insured for the costs associated with dealing with this legal claim.
Music industry veteran Mercuriadis, known for managing artists like Elton John and Beyonce, founded Hipgnosis Songs in 2017. The company went public on the London Stock Exchange, offering investors access to song and music rights. Hipgnosis Songs owns rights to popular songs like “Shape of You” by Ed Sheeran and catalogs of various artists, including Shakira, Neil Young, and Red Hot Chili Peppers.
The legal action also alleges that Hipgnosis Songs assisted Mercuriadis, who serves as the CEO of HSM, with the alleged diversion. Hipgnosis Music Limited, incorporated in 2015 with Mercuriadis as a director, had a winding-up petition filed against it by Mercuriadis in 2017.
This legal development adds another layer of complexity to the challenges faced by Hipgnosis Songs, which has been navigating difficulties in the music royalty fund landscape.
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