Independent classical music label Naxos is suing Chinese classical music streaming service Kuke, accusing it of failing to make more than $1.8 million in payments over the past three years.
Naxos said in a complaint filed in the U.S. District Court for the Middle District of Tennessee on Friday (October 4) that Beijing-based Kuke began defaulting on license payments in late 2021 and has since paid only a fraction of what it paid. part.
Naxos asked the court to order Cook to pay the full amount, plus interest and compensatory damages.
The lawsuit is the latest financial woe for Cook, causing concern for him. US$50 million IPO on New York Stock Exchange in January 2021. $1 per share The company was threatened with delisting, the minimum requirement for listing on the New York Stock Exchange.
Cook announced earlier this month that it had regained compliance with the New York Stock Exchange’s listing rules, with its shares trading at approximately $1.30 then. Howeverthe stock price once again fell below $1 recent weeks.
According to Naxos’ legal complaint, which can be read in full here, Kuke and Naxos signed an eight-year digital distribution deal in 2018 that will see Kuke license music from the Naxos label group as well as third parties.
Lawyers for Naxos said Kuke made monthly payments on time until the payments stopped in December 2021.
“While Naxos continued to send Cook monthly invoices, Cook failed to make the required payments to Naxos,” the complaint states.
In May 2023, Naxos notified Kuke that the streaming service was in breach of contract and required the company to repay an amount of $1.055 million.
Cook responded by admitting he had breached the contract and offering a monthly payment plan to repay the balance owed by the end of 2023, according to the complaint.
“While Naxos continued to send monthly invoices to Cook, Cook failed to make the required payments to Naxos.”
Naxos legal action against Cook
After some negotiations, Naxos agreed to a repayment plan whereby Cook would repay the outstanding amounts, including 6% interested in $200,000 Installments are payable in 2023, with the remaining balance due at the end of the year.
According to the complaint, Kuke made two payments $50,000 – well below the agreed-upon monthly payments of $200,000 – and no further payments were made.
In a letter sent to Cook in April 2024, Naxos demanded that Cook “pay the outstanding amount to Naxos” $1.43 million to the end of the month. The letter also demands that Cook remove music released by all third parties covered by the Naxos agreement. However, as a sign of goodwill, Naxos allowed Kuke to continue playing its own label’s music.
These brands include flagship brands based in the UK Naxos Recordsand folk tags ARCMusicaustrian classical label whimItalian classical/opera label dynamicgerman classical label Eames and Orpheusas well as Finnish classic brands Ondine.
Kuke responded to Naxos’s request, stating that it has begun to remove music from third-party record companies and is willing to pay $30,000 Three weeks later.
Naxos responded by calling the $30,000 payment “completely unacceptable” and demanding that its own label be removed from Kuke’s library as well.
Following “ongoing but unsuccessful” negotiations between the two companies, Naxos informed Kuke in May 2024 that it would initiate proceedings to terminate the distribution agreement if full payment was not received within three weeks, noting that Kuke had failed to Take Action Naxos owns the content on its service.
Cook responded that new repayment proposals were being developed, but no such proposals had yet been made, according to the complaint.
As of September 1, Cook owes Naxos $1.855 millionthe complaint states.
Naxos asked the court for full payment, including interest, and compensation for the amount owed.
Despite ongoing conflicts over payments, Cook and Naxos appear to have continued to conduct business in other ways.
Earlier this year, Cook announced his intention to acquire majority stakes in two companies owned by Naxos Music Group, Angelina Assets Ltd. and HNH International Co., Ltd.. The company has not publicly provided any updates on its acquisition plans since then.global music business
