After 30 years as the bass player for the all girls band The Go-Go’s, Kathy Valentine is suing her former band mates for cutting her out of her twenty percent share of earnings.
The Go-Go’s jumped to fame in the early 80′s and continue to make money from merchandise, touring and record sales. The five band members – Belinda Carlisle, Jane Wiedlin, Charlotte Caffey, Gina Schock and Kathy Valentine – are equal owners in Ladyhead, LLC (receives all revenues for the The Go-Go’s excluding touring and owns The Go-Go’s trademark) and Smith-Pocket Industries, LLC (the touring arm of The Go-Go’s).
The four remaining band members notified Valentine earlier this year that she was out of the group. The lawsuit alleges the four remaining members formed a new entity, GoGoCo Corp., to license all of the rights associated with the name and good will of The Go-Go’s as well as touring. If that is the case, Valentine’s twenty percent share of revenues would be substantially diluted as GoGoCo Corp. would be calling the shots on when and how much money would flow to LadyHead, LLC and Smith-Pocket Industries, LLC.
It sounds like the group did things the right way years ago be forming the two initial entities where each band member was an equal owner. I suspect the operating agreements for those entities address what happens when a band member quits on their own or is forced out. But, maybe they don’t or the language is not beneficial to Valentine, as the lawsuit never specifically discusses those sections of the LLC operating agreement. Instead, the plaintiff’s complaint focuses on breach of fiduciary duty and breach of contract in not continuing to pay Valentine her one-fifth.
Sounds like the perfect case for mediation. The parties have all aired their laundry over the years and need a neutral party to help them work through a potential mine-field of separation issues.