Metropolitan Sues For CMJ Debt

Metropolitan Talent CEO John Scher filed suit earlier this year against CMJ and its founder Bobby Haber, noting the companies entered a merger agreement in 2009 valued at $2.4 million that eventually broke down.

At the time, Scher announced Metropolitan and CMJ would work together to create college music content and develop new tours.

“One of the things right now is lack of artist development, the inability to build headliners, and not just for arenas and amphitheatres but even large theatres and ballrooms,” Scher told Pollstar following the deal. “We’ve discussed these issues with CMJ and realized they’ve got direct relationship with more than 600 radio stations and these stations haven’t been taken seriously for a long time, but they’re the incubators and where the rabid fans are hearing new music for the first time.”

Metropolitan loaned CMJ nearly $600,000 in subsequent years in the form of promissory notes, the suit says, but the money was never repaid and the debt now stands at nearly $750,000 including interest.

The suit also claims CMJ then fraudulently transferred its assets to another corporation with complete disregard for its debts to Metropolitan.

“This case is a perfect example of what happens when venture capitalists scoop up the assets of companies for a song and attempt to cut off the rights of existing creditors,” Metropolitan attorney Robert Pearl said in a statement. “The CMJ brand was sustained through Mr. Scher’s financial and personal contributions and the new owners have simply tried to stiff him.  We are confident the Court will see through this subterfuge and will award Mr. Scher his full damages.”

Scher said he tried to settle up with CMJ for more than a year as the companies have a long-standing relationship, but his efforts proved unsuccessful.

“For an independent company like ours, this is an enormous amount of money. We’ve been ignored, we’ve been lied to and it’s a shame,” he said, adding, “We did everything we could to save CMJ Music Marathon. They just moved on to other investors.”

CMJ plans to file a motion to dismiss the case during an Oct. 24 hearing, according to court documents.

CMJ Music Marathon runs Oct. 15-19.