In 1990 Rykodisc released the CD Badfinger Live: Day After Day. This was the first U.S. release of a Badfinger product in fifteen years.
In 1990 Rykodisc released the CD Badfinger Live: Day After Day. This was the first U.S. release of a Badfinger product in fifteen years.
The CD packaging suggests you would be purchasing a representation of a live Badfinger concert from March 4, 1974. Joey Molland co-produced the project with Mark Healey. In the liner notes Joey stated "....this release is taken from the original 16-track masters which have been in my possession since 1974. The difference is what happens when you plug in to 1990."
The master tape of the 1974 concert was a sixteen track tape that had thirteen tracks utilized.
A situation arose when it was discovered by Badfinger's group accountant, some five years after the CD's release, that Joey was receiving 100% of the "sales royalties" he'd contracted out from Rykodisc (the licensee). The accountant took it upon himself to deduct what he felt the other Badfinger parties were obligated from this project (according to certain 1985 court order guidelines) by his re-distributing a portion of Joey's Apple-related royalties to the others. Joey eventually acknowledged the Badfinger Live: Day After Day CD sales royalties should have been split five ways from the onset, as it was a group-owned master tape, but he felt money shouldn't have been taken from his account, by the accountant, until there had been a clear resolution regarding his expenses for producing the project and his work as a producer. All of the other involved parties (Bill Collins, Mike Gibbins, Marianne Evans, Petera Ham) felt Joey had been deceptive, and they weren't amiable to giving him exactly what he was seeking. A settlement on these issues couldn't be resolved for over two years, so the case eventually went to a London High Court.
Presented here are excerpts of affidavits done prior to the trial and the judges decision. Not available are transcripts of the court proceeding itself. Testifying in court were Joey Molland, Kathie Molland, Mike Gibbins, Robert Press (Goldblatt accountant), Bill Collins, and Anne Collins.
Other affidavits done prior to the court date were from Timothy Douglas-Jones, Mark Healey, Anne Frances Collins, Robert Press, Scott Bartel, Paul Martinson, J.B.C. Radcliffe, and John Weyrauch.
This is Judge Goldsmith's initial description of the lawsuit: "This case raises, as its principal issue, when a trustee or other fiduciary may be entitled to receive remuneration for services which have benefited the beneficiaries where that remuneration has not been agreed in advance by the terms of the trust or by the beneficiaries. It arises in the context of a dispute between the former members of a rock band, Badfinger, which in the early 1970s was internationally known. the issue concerns the rights to royalties from a recording of the band playing live at the Agora Club, Cleveland, Ohio on 4 March 1974."
Following are portions of some of the affidavits presented prior to the court hearing:
KATHIE MOLLAND
I am the wife of Joey Molland. We married in June 1972. At that time I had run a weight loss salon and was now modeling, but I gave this up and moved in with him and the band in England in 1970, and used to go on the road with them. I was used to running a business and had been trained in music so I got involved, and by the late 80's I was handling some of the business side of Joey's affairs including taking bookings, handling agents and organising the PR.....
In April 1974 the band was recording in Denver and the 16 track tapes from the Agora concert were sent to the Caribou Ranch in Denver. When the band flew back to England to do the overdubs to Wish You Were Here that summer the tapes were sent back to Air Studios in London...
I just wanted to protect the tapes for the band, and so I removed them from Air Studios on behalf of the band and kept them at our rented townhouse. I had no discussions with anyone else (which includes Joey) prior to taking the tapes.
We moved out of our townhouse (in London) in November 1974, we moved the tapes and all our stuff to Joey's dad who lives up north in England and they were stored in his attic. In mid-1977 Joey's dad sent them over to us in California. By this time the original band had split up. We decided to listen to them out of interest... They sounded appalling. All three of us agreed that they were no good and nothing could be done with them so we shelved them again.
Tommy Evans came over shortly after that to record an album with Joey... We may have well shown Tommy the tapes as they were on open display in our house with big Caribou Ranch labels on...
I am also certain that I mentioned the 16 track tapes to Mike Gibbins... I remember we went on to talk about the 1974 concert at the Cleveland Agora, and I am as certain as I can be that I mentioned that Joey and I had the original 16 track tapes.
I never talked business with [Marianne] until we started the album. At that time we used to exchange parcels of presents. I remember sending her a big bunch of presents including the album and some Badfinger T-shirts. I remember because I wanted to impress Marianne by showing her what we were doing...
I was also present when Joey phoned Bill at about Christmas 1995 to try and sort out the situation with the accountant. I remember hearing Joey say that we had given Bill a copy of the CD and although I could not hear what Bill was saying I remember Joey replying, "There it is Bill, you see, I told you that you do have it." ...
There has been fairly regular comments on the Day After Day album in the press in the U.S. and in various fanzines. I was in the habit of sending copies of such stories to the other members of the band/their families whenever one of them was mentioned. I am therefore positive that the other members of the band and their estates would have been aware of Day After Day from this album.
JOSEPH CHARLES MOLLAND - Affidavit #1 - April 19, 1997
While I am absolutely certain that I sent advance copies of Day After Day to all members of the group (including the administrators of the deceased members of the group) in about June 1990... I cannot be sure that I sent one to Goldblatt & Co., although I think that I did.
I sent Mike Gibbins (but not the others) a copy of the album on cassette in about February or March 1990, when we had finished in the studio. I had spoken with him to tell him that we had finished in the studio and to tell him that I was keen to hear what he thought... When I discussed it with him he liked it overall and was happy with it, although I do remember that he had one particular concern. Mike was the group's drummer, and after he head the CD version he commented that he was unhappy about the sound of the snare drum, which he felt was different from that on tape...
Shortly after I sent out advance copies of Day After Day to the other members of the band I was telephoned by Mike Gibbins... I remember our telephone conversation well. Mike asked me what was happening with royalties from the album. I explained that these would be paid to the band in the same way as the band's other royalties and that the royalties I would receive would be used to pay production costs and my producer's royalty. Mike then told me that he was broke and that he needed $2,000. He said that if I sent him $2,000 this would help him out and he would say nothing bad about the album or ask for money from me again. By this I understood him to mean he wouldn't raise a stink about the royalties. I therefore had my bank wire $2,000 to this account in Florida, where he lives.
I distinctly remember discussing royalties and production costs from the Day After Day album in a conversation with [Bill Collins] in my living room at home.... I remember explaining what the royalty position was, what production costs there had been, what royalties the band should receive from this album, and the royalties I received would be used to pay production costs and the like. I did so because I wanted him to be clear on this and because I wanted to be completely open about the position.... The conversation was friendly and there was no argument about any of this. Bill understood that the band was getting one hundred percent of the publishing royalties, and seemed satisfied with everything I had told him...
I accept that the publishing and recording royalties from the Day After Day album fall within the scope of the Consent Order dated 24 September 1985... and that all the members of the band should get the royalties due to them under it. However, I believe I am entitled to recovery of my producer expenses, to fair payment of a fair producer's royalty (including the co-production royalties I am obliged to pay Mark Healey) for having produced this album, which has undoubtedly benefited the rest of the band...
JOSEPH CHARLES MOLLAND Affidavit #2 - January 27, 1999
Mid-1974 was a time of tension and disruption for all of us in the band... and Bill Collins seemed to be working on other projects in preference of us.... One day when all the band were at Air Studios, my wife Kathie saw the tapes lying around and said she was going to take the tapes home today and I said fine so she brought them home with her...
I am certain that all the other members of the band knew that she had taken the tapes. She and I regarded this as simply taking the tapes for safekeeping...
In 1978 Tommy Evans and I were recording together in Los Angles, CA... The 16 track tapes were sitting on the shelves in plain view. I am as certain as I can be that Tommy did see the tapes and knew what they were, he also expressed no concern or surprise at my having them. However, I can't remember whether we listened to them at that time...
Although I have no documents to evidence the fact that I also sent copies of Day After Day to the other members of the group, I am certain that I did so... My recollection is reinforced by the interview I gave to Scene (published in their 4-10 October 1990 issue), where I am quoted as saying, "I sent copies of it [Day After Day] to Marianne, Tommy's widow and Pete's widow and family, and they loved it."
All my discussions with Rykodisc were about them putting out my masters as a live CD, and which I very much regarded as my own project. I regarded the masters as my own, as they were the result of a great deal of hard work and effort, during which time I had worked on them to the exclusion of other income-earning activities.
MARIANNE EVANS
As far as the Day After Day CD is concerned I do recall that in or around the summer of 1990 I received a copy of a CD with this title. I cannot recall whether there was a covering letter with the CD and I note that Mr. Molland has alleged that it was sent out with a short hand-written covering note although I cannot recall this. At no stage prior to this had Mr. Molland or his wife or any other person mentioned to me the 'Day After Day' project and the first I knew of it was when the CD was sent to me. I did write to Mr. Molland's wife in November 1990 commenting on the CD although I am surprised that Mr. Molland should rely on my letter as evidence of my consent to this release and the work done on this. It was certainly not my intention to endorse or approve any unauthorised actions in this way. At that time I did not know precisely what Mr. Molland was up to. When I received the CD and which by then I learned had been already released, I simply assumed that all other members of the group and their estates had given their prior approval, that the proper channels had been followed and that royalty income would be generated and apportioned appropriately. I certainly did not know at this stage that none of the other members of the group had given their approval to the works to be included on the CD and the format of those, that the reproduction fees were being claimed by Joey Molland personally, that there was no check on these, and at that stage Mr. Molland had already received an advance against of $30,000. These matters only came to my attention in late 1994 when I discussed the matter with Mr. Mike Gibbins...
BILL COLLINS
As I think is acknowledged by Mr. Molland, the tapes of the Agora Club gig in 1974 are and remain the common property of the five members of the Badfinger partnership. These tapes, which had been lodged in my care in the partnership's office (which was also my room in the partnership's communal home and headquarters), inexplicably disappeared, and for ten years I had no idea who had taken possession of them. It has since been reported that Kathie Molland took them out of the house hidden under her coat.
I cannot recall ever receiving a copy of theDay After Day CD which it is alleged by Mr. Molland may have been sent to me in and about June, 1990...
My wife, Anne, and I paid social visits to the Mollands in Minneapolis on at least one occasion each year in the late eighties and early nineties. The main purpose of these visits was to keep in touch with their lifestyle as he had never paid Mike Gibbins or me his share of the costs of the 1985 Court case...
During these visits the Mollands always dangled in front of me the promise of copious royalties we would all get from the publishing royalties earned by an album he said he would be making with his American Touring Band and which would feature him singing all the hits Badfinger had written. The Agora Club tapes were never mentioned. He never even gave away to me the fact he and his wife had those tapes in his possession. He gave me and my wife the impression that these royalties which were to be coming our way would come from an entirely different album on which a group of American musicians which included a bass player named Mark Healey. On this album he would be featured singing Badfinger songs, and consequently we, as the song-writers, would be getting "a lot of money." it is therefore simply untrue that we had a discussion regarding the royalties and production costs from the "Day After Day" album in or around September 1993. Regarding Molland's engagement of the unknown-to-me Mark Healey in some indistinct capacity on his secret CD project, I wouldn't have countenanced this for a moment.
Mr. Molland is not a record producer. I would never have agreed to him producing a CD from the Agora Club tapes under any circumstances. For one thing, he doesn't have the necessary skills and this has been proved by the inferior CD we are presented with. For another thing, I knew he would exercise selfish vested interest in the end this belief has been borne out. It has been well documented in my diaries and elsewhere, that Molland the last to join the group, was jealous of the group's leader, Pete Ham...
MIKE GIBBINS
Dealing firstly with the original tapes in the possession of Mr. Molland, it is important to highlight that these tapes did not belong to Mr. Molland, but belonged to the group as a whole. Mr. Molland has not dealt with the circumstances in which these tapes came into his possession, nor does he deal with his failure to mention in his negotiations with Rykodisc that he had no right to represent these tapes.
It was not until mid-1989 that Mr. Molland first informed me that he had in his possession a live recording of a 1974 gig given by Badfinger at the Cleveland Agora Rock Club. At the time Mr. Molland also informed me that he was doing a deal with Rykodisc to have the recording released commercially. I automatically assumed at that stage that the proper channels would be followed and that as with any of the group's music material, a contractual agreement would be forwarded to all parties involved for their approval and authorization. This did not occur... I only received a copy of the CD after it was completed and released.
In May 1990 my royalties from ASCAP were garnished to satisfy a judgment against Mr. Molland by his booking agent who had not been paid his agency fees by Mr. Molland... This reprehensible maneuver of Molland's is made harder to stomach by the knowledge that at that time, by his own admissions, he had received a $30,000 advance pay-out for the Day After Day CD from Rykodisc which he kept hidden from his partners in the real Badfinger group who performed on that gig.
Although I had not received any further communication from Mr. Molland regarding the Day After Day project I became suspicious when Mr. Healey telephoned inquiring about royalties as he had not been paid by Mr. Molland. I telephoned Rykodisc and inquired about the release of any material and the royalty payment position. They would not talk to me and told me to take it up directly with Mr. Molland. When I telephoned Mr. Molland he stated that he had received no money from Rykodisc as yet. I confronted Mr. Molland on this issue and the issue regarding the garnishing of my royalties. he did not mention any release and immediately offered to send me $2,000 which I subsequently handed over to Goldblatt and Co. for redistribution to all parties and estates involved in accordance with the 1985 settlement.
Having now had the opportunity to consider the CD under no circumstances whatsoever would I have given my consent to its release in its current form. For instance, on some tracks I didn't recognise my own drumming. It seemed to have had an electronic drum machine superimposed over my playing...
As matters came to light so did the amount of expenses allegedly incurred by Mr. Molland. Mr. Molland had no authority to incur any expenses and these were not authorised by any other members of the group. I do not believe that I should be responsible for paying a producer that I never engaged for the type of work which he did...
On a final note, Mr. Molland makes several accusations that he was in regular contact with me and that I stayed at his house during this time. I did not visit his home as he has claimed and whereas I did speak to him on one occasion when I threatened to sue him I only became fully aware of the financial, contractual, and music implications of Mr. Molland's actions regarding the Day After Day CD following Goldblatt and Co.'s investigations.
GEOFF FOSTER
(Defendant's engineering expert witness): has worked with Radiohead, Crowded House, Paul McCartney, Sting, Mark Knopfler, Elton John, Culture Club, and others.
As a listening experience I find that this CD is a poor representation of a live concert in 1974. I feel that it has little sense of authenticity due to the production values that have been adhered to in its creation.
The bass drum and snare drum appear to have been replaced with samples... The listener is only able to discern the sampled sounds.
The bass guitar on the CD appears to have a round sound that I doubt could have been produced solely from the sound recorded on the original 16 track tape. The parts played by the bass on the CD are not identical to the performance on tape. I would suggest that another bass part has been overdubbed...
Many of the guitar parts on the CD are significantly different in tonality and notation and have clearly been re-recorded in a studio environment... Other guitars have been double-tracked and chorused heavily.
There are additional backing vocal parts on some songs whose quality and performance suggest that new recordings were made for the CD...
The 4 songs that were played live, but were not included in the final CD are: "Suitcase," "Perfection," "Only You Know And I Know," "Johnny B. Goode."
Re-recordings or new recordings discerned from CD comparison to the 16-track master tape: (Foster was not supplied with Joey's 24-track with the new overdubs added. Joey claimed it had been lost)
Sometimes - Joey lead vocal, rhythm guitar, bass, backing vocals, added drums, drum samples
I Don't Mind - Joey lead vocal, backing vocals, bass, rhythm guitar, lead guitar, drum samples
Blind Owl - backing vocals, rhythm guitar, bass, drum samples
Give It Up - Joey lead vocal, rhythm guitar, lead guitar, backing vocals, bass, drum samples.
Constitution - Joey lead vocal, rhythm guitar, bass, added drums, drum samples
Baby Blue - backing vocals, rhythm guitar, lead guitar, bass, drum samples
Name Of The Game - rhythm guitar, backing vocals, bass, drum samples
Day After Day - rhythm guitar, backing vocals, bass, drum samples
Timeless - rhythm guitar, bass, backing vocals, drum samples
I Can't Take It - rhythm guitar, lead guitar, backing vocals, bass, drum samples.
Judge Goldsmith's written statement after trial:
1. This case raises, as its principal issue, when a trustee or other fiduciary may be entitled to receive remuneration for services which have benefited the beneficiaries where that remuneration has not been agreed in advance by terms of the trust or by the beneficiaries...
2. ....The Claimant (Molland) then arranged, by an agreement dated 1st May 1990 with Rykodisc Inc. a record manufacturer in Minneapolis, for Rykodisc to manufacture and distribute the release under licence on a worldwide basis in return for a royalty rate escalating with sales effected from a base of 13% of net retail sales in the United States and half that amount for sales outside the United States. Under the written agreement the Claimant (Molland) warranted, amongst other things, that he was the sole and exclusive owner and proprietor of all rights in the recordings, that he had full right, power and authority to enter into the agreement and that he had secured the consent in writing of all artists including the musicians who performed. At least two of those warranties were not in fact justified: Mr. Molland was not the sole and exclusive owner of all rights on the recordings, and he had not secured the consent in writing of all artists including of the musicians who performed. As to the other warranty, he had not consulted any of the Defendants as to the terms of the Ryko deal before entering this agreement.
3. ... Mr. Molland did not attempt to account for any of these royalties before Goldblatts raised the issue with him in 1995/6...
4. ... I infer that his (Joey Molland) change of view was a result of receiving advice from his English lawyers.... "Having now received legal advice as to the meaning of the consent order, Molland accepts that a) he held the Agora tapes and any royalties or benefit derived from them upon trust for the rest of the band and Collins... d) ... those royalties should have been paid to Goldblatts and divided in accordance with the Consent Order."
5. The Claimant's (Joey Molland) case, supported by evidence of Mr. Healey (who was not called to give evidence) was that the agreement was that Mr. Healey should be paid 2% of net retail sales. However, the written agreement produced was somewhat inconsistent with that, allowing as it did for hourly fees together with a rate payable on the wholesale sales. Even allowing for the evidence that the retail rate would be 1/2 of the retail rate, this was troubling. However, more troubling was the failure of Mr. Molland to produce any more than a very few cheque carbons representing only a very small part of the monies he claimed to have paid over. I am surprised that more cheques were not produced or that bank statements showing the payments were disclosed...
6. Whether the Claimant is entitled to a producer's fee for the work he did onDay After Day has been the most controversial issue, ... The basic proposition is not in dispute: ... The general proposition, as set out... "As a result of the rule that a trustee cannot make a profit from his trust, trustees and executors are generally entitled to no allowance for their care and trouble. This rule is so strict that even if a trustee or executor has sacrificed much time in carrying on a business as directed by the trust, he will usually be allowed nothing as compensation for his personal trouble or loss or time."
7. Against this background, I turn to consider the facts which appear to me to be relevant in determining the claim of Mr. Molland to remuneration. In doing so, I must now deal with certain of the contested facts in the case:
a) Importance of the work done by the claimant
As I have already indicated, it is now common ground that a significant amount of work was required before an acceptable album could be made from the tapes. If Mr. Molland had not done this work, someone else would have had to do it, and would have had to be remunerated for doing so. There is no credible case that the quality of the work was in any way deficient...
b) Special nature of the work done
Additionally, Mr. Molland was able to bring to the task special qualities which otherwise could not have been provided. He is one of two remaining members of the band. The other, Mr. Gibbins, is a drummer. Mr. Molland was able to re-record his own vocals and guitar pieces to bring them back into line and into tune. No one else could have done that and left a genuine "Joey Molland guitar" on the album...
c) The conduct of Mr. Molland
Mrs. Molland's evidence, supported by that of her husband, was that she had taken the tapes to protect the interests of the band. I find this evidence difficult to accept. Mrs. Molland's evidence was that she "just wanted to protect the tapes for the band and so removed them from their studios on behalf of the band and kept them at our rented townhouse." If that had, however, been her purpose, I consider it more likely that she would have made a specific statement to that effect to the band and that when her husband left the band, (if that was not the time when she took the tapes), she would have made it clear to the other members of the band that she still had the tapes and was holding the tapes for them. I consider it more likely that the tapes were taken in the throes of a break-up of the group in which Mr. Molland was to receive no compensation and the equipment, apart from his guitars, was to be left with the group. It was, as I find Mr. Molland told the interviewer of the Badfinger fanzine, that is was a case of "grab what I could"...
8. Their conduct, thereafter, in making the arrangements commercially to exploit the tapes themselves is also not without criticism. I find that Mr. Molland did tell Mr. Gibbins in 1988 or 1989 that he had the live tapes in his possession and was engaged in re-mixing them for a re-release. Mr. Gibbins response, as he told me, was not one of objection. Rather he said, "Go for it." Mr. Gibbins was content for Mr./ Molland to continue with this course in the expectation that he would, in due course, receive royalties from it...
9. ... before engaging on the project, (Molland) made no attempt to consult other members of the band or Mr. Collins as to the proposed treatment of the disc or the arrangements he proposed to make with Mr. Healey or the Bajus Jones Studio or Rykodisc. These are steps he ought to have taken, in my judgment, as this was not his property to deal with alone. However, had he done so, the consequence would either have been that the project would have continued artistically in the same way with Mr. Molland in control or, there would have been fundamental disagreement and no project at all would have taken place....
10. Mr. Molland is to be criticised for the way he dealt with the recording royalties. He told me that he had always intended that the group would share in the recording royalties. I do not accept this...
11. He made no attempt to share any part of those royalties with any other members of the band or to account for them to Goldblatts, notwithstanding his knowledge of the Consent Order...
12. I was pressed to consider whether that conduct amounted to dishonesty, but, in the absence of that issue being properly explored in cross-examination with Mr. Molland, I am not prepared to reach that conclusion. Rather, I consider that Mr. Molland (with his wife's encouragement) had persuaded himself that, given that they had been in possession of the tapes for over 15 years, that he had done all the work to produce a salable recording, and that the band members would be receiving publishing royalties. It was just that he should retain profits from the recording royalties...
13. Overall, I regard Mr. Molland's conduct as open to serious criticism. He does not stand in the same category as those fiduciaries who have been described as operating with entire honesty and propriety. However, given that I reject the allegation that he kept the whole project secret and reject the allegation of outright dishonesty, I do not regard his conduct as so egregious as to deprive him of any remuneration for the undoubted value he provided through his considerable and specialist efforts.
14. Conflict of Interest I reject some of the conflicts suggested as being unrealistic and not related in any way to the commercial exploitation of this material, which is what the account of profit is about. For example, (Defendant's Barrister) suggested that other beneficiaries might have preferred that no commercial re-mix be made at all because the underlying tapes were poor and that they would prefer to retain the memory of the original group members intact. I regard this as unrealistic...
15. I conclude, having regard to these factors, that this is one of those exceptional cases where the court is justified in awarding remuneration to the fiduciary notwithstanding the general rule...
16. It is appropriate to adjust an allowance to Mr. Molland to take account of the fact that I do not regard it as right, in the circumstances, that he should have received the same amount as he would have received if he had openly consulted and agreed with other band members and Mr. Collins...
AWARD BY THE JUDGE:
Joey initially sought $21,181.50 in expenses. $17,500 was determined by both parties and the judge to be the relevant expenses. The judge said that this amount be shared equally by the five parties. Thus Joey is to recover $14,000 in production expenses (plus interest accrued after October 1996). Joey had earlier been sued by Mike Jones Film Company (a recording studio) for non-payment of a portion of Joey's initial spec recording deal for the CD's overdub and mixing work. The studio was eventually paid the overdue amount, $10,073.06, via a check administered by Badfinger's group accountant Goldblatt & Co. in July of 1993.
Joey sought that 6% of Ryko's 13% royalty for each retail U.S. sale be paid to him as a "producer royalty." Joey claimed 2% of the 6% was to pay Mark Healey as a co-producer. Thus, if accorded Joey's desired overall scenario, 7% would be left to split between the five parties (including Joey). Joey's overall royalty would then be 7.2%, the others would receive 1.2% each.
If Joey had received what he sought for the producer role, Joey would have been awarded $35,098 of the $76, 046 accrued up to June of 1995 as the "producer royalty." Then he would have received more producer money for the sales from June 1995 to January 2000. Joey was awarded $10,000 as a flat one-time fee (no future producer royalty will go to Joey).
Mark Healey can potentially recover from the other four parties 80% of what Joey allegedly paid him. Joey still has time to supply more proof, as in court, he didn't supply what the judge deemed as sufficient receipts or bank statements to satisfy Healey had even been paid.
All of the CD's sales royalties which Joey negotiated with Rykodisc are to be divided equally amongst the five parties retroactively and for the future.
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