As CMJ Takes Over NYC, A $1M Lawsuit With Metropolitan Looms

NYC is in the midst of a week of indie rock bliss thanks to the CMJ Music Marathon. But a dark cloud is looming just over the horizon. John Scher's Metropolitan Entertainment has sued CMJ, the college music trade publication and company behind the Marathon, over a failed $1 million dollar merger.

According to the New York Times, CMJ and its founder, Robert Haber, allegedly agreed four years ago to merge with Metropolitan Entertainment, with plans to expand the CMJ Music Marathon brand. The deal, however, failed to complete and now lawyers for Metropolitan are alleging that CMJ has failed to repay the lion's
share of nearly $600,000 in loans from Metropolitan that helped the CMJ Festival remain solvent in 2009 and 2010.

Metropolitan is seeking almost $800,000 to cover the principle of the loans, along with interest; almost 100,000 in other expenses; and legal expenses related to the lawsuit.

Metropolitan's suit further alleges that CMJ committed fraud when they transferred assets to another corporate entity to shield them from Metropolitan. They further allege that CMJ found an additional investor for their business, despite the ongoing dispute with Metropolitan.

“We were going to take over a company that was habitually in the red, and make them a considerable payment, and they just decided to ignore that,” Mr. Scher told the New York Times.

CMJ did not respond to a request for comment.

Originally founded in 1978 as a music magazine, they stop publishing their print edition in 2010, ceding much of their cachet to competitors such as Pitchfork. The CMJ Music Marathon has been staged since 1980, but faces an increasingly competitive U.S. festival market. The 2013 edition of the festival is set to take place this weekend at New York University and other venues in downtown New York City. – via Celebrity Access