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(Alliance News) - Hipgnosis Songs Fund Ltd on Monday said it has appointed solicitors to review the claim made against its founder Merck Mercuriadis, Hipgnosis Songs Management and the company by Hipgnosis Music Ltd.
London-based investor in music rights Hipgnosis Songs said it has appointed Kastle Solicitors independently of the other defendants to review the claim, seeking an indemnity from Mercuriadis and Hipgnosis Songs Management "against any liability".
Hipgnosis Songs said Hipgnosis Music, of which Mercuriadis was a director from June 2015 and is still shown as director on UK Companies House, alleges an "unlawful diversion" of the Hipgnosis business opportunity by Mercuriadis to the company and the investment adviser Blackstone.
Hipgnosis Music are seeking to recover a "substantial but as yet unquantified" sum under the claim, Hipgnosis Songs said, having recently become aware that Hipgnosis Music has secured litigation funding.
Hipgnosis Songs previously noted the lawsuit in November and in its 2023 annual report.
Shares in Hipgnosis Songs were down 0.9% to 64.70 pence each in London early Monday.
Just before Christmas, Hipgnosis Songs released its interim results, but warned investors that some figures should be digested "with a higher degree of caution and less certainty".
This came just two days after the music intellectual property investor flagged discrepancies between an independent valuation of its intellectual property assets and its manager's own view. Three days earlier, Hipgnosis delayed the release of the results.
On an IFRS basis, net asset value per share at the end of September fell 7.2% to 110.12 US cents from 118.63 cents at the end of March, or 9.2% to 173.92 cents from 191.53 cents on an operative basis.
Total revenue over the six months fell to USD63.2 million from USD86.2 million a year before, with net revenue from continuing operations falling to USD54.0 million from USD76.8 million - which was driven by a USD11.9 million reversal of CRB III accrual due to lower anticipated future retroactive payments.
By Greg Rosenvinge, Alliance News senior reporter
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