(Alliance News) - Hipgnosis Songs Fund Ltd on Monday said that its request for an indemnity from its founder had been denied, prompting the company to pursue court action in pursuit of the full amount.
Hipgnosis is a London-based music investment and song management company with a market cap of GBP795.5 million.
In early February, the company said that it was seeking an indemnity against liabilities stemming from alleged misconduct by its founder Merck Mercuriadis and Hipgnosis Songs Management Ltd, the investment adviser owned by funds managed or advised by Blackstone Inc.
In November, the company noted a lawsuit by Hipgnosis Music Ltd, stemming from "an unlawful diversion of the Hipgnosis business opportunity by Mr Mercuriadis to the company and the investment adviser." Hipgnosis Music is seeking to recover "a substantial but as yet unquantified sum" under the claim, the company said.
The investment adviser, founded by Mercuriadis who sits on its board of directors, has refused to indemnify the company, despite assuring it that the allegations are without merit.
Hipgnosis Songs Fund says that it is concerned by the refusal, as it is not insured as to the cost of the claim.
The company now intends to bring a part 20 claim against the investment adviser in the high court for a full indemnity.
Shares in Hipgnosis were down 0.5% at 65.78 pence per share in London on Monday morning.
By Hugh Cameron, Alliance News reporter
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Hipgnosis Song. (SONG)