SFX is working to block millions of dollars in claims against the company by founder and lame duck chairman Robert Sillerman.
Yesterday, a lawyer working for SFX filed an objection to $15.8 million in claims filed by Sillerman to cover his legal costs and reimburse himself for several acquisitions including the purchase of Chicago EDM promoter React Presents. SFX Lawyers are also opposing several requests by Sillerman to indemnify himself from future lawsuits.
Sillerman “seeks reimbursement for potential losses Sillerman might incur as a result of his guaranties of the primary obligations of certain of the Debtors,” attorney Colin Robertson wrote in a court filing.
Sillerman wants $531,912 to pay the Paul Hastings law firm for “its defense of certain litigation in which both Sillerman and SFX Entertainment, Inc. were defendants.”
He also wants to “assert rights of subrogation and indemnification in the amount of up to $7,826,353” for a promissory note written to React Presents, Clubtix and React Founders Lucas King and Jeff Callahan.
“As of April 30, 2016, the alleged amount due on the note was approximately $6 million, with interest claimed to be accruing at over $1,600 per day,” Robertson wrote. “The claims fail to allege that Sillerman has paid any amounts under the React Guaranty; therefore, the claims are unliquidated and contingent.”
Sillerman is also asking for $7.5 million arising from a deal between Spotify and Beatport — SFX lawyers allege there is no evidence Sillerman paid anything to Spotify, and are also asking that requests for indemnification be denied.
“The Sillerman Guaranty Claims arise under Sillerman’s guaranties and are contingent claims unless and until he pays the underlying debts to the beneficiaries of his guaranties,” Robertson wrote. “Because he has not even alleged he has paid any amounts to the beneficiaries of his guaranties, the Sillerman Guaranty Claims are contingent.”