Warner and Sony Music have each settled the vast majority of their $50 million bankruptcy claims against Beyond Oblivion as the troubled start-up tries to revive its new music service Boinc.
While the claims will still stand, the parties have agreed a cap on payments that will see the two labels collect just $1.5 to 2 million each, pending judge approval.
Beyond Oblivion filed for Bankruptcy in January after attempting to set up new cloud-based music service Boinc, which would pay royalties to artists without subscription fees or advertising on the consumer side.
Instead Boinc would be made available for a flat fee for including the service on a mobile or computer, but hardware manufacturers were put off by the model.
Now owned by former CEO Adam Kidron and former CFO James Heindlmeyer under the name Gee Beyond Holdings (GBH), Beyond Oblivion is relaunching Boinc as an iPhone application.
Claims from creditors following the company’s demise included $50 million apiece from Warner and Sony Music who claimed that deals struck with Beyond Oblivion were operative having signed Digital Download Sales Agreements, providing access to their music catalogues.
The parties have now reached a settlement, however. Both Warner and Sony claims will stand but the duo will collectively obtain recoveries capped at 60% of net proceeds of the sale and 50% of net proceeds of a GBH loan.
Via: Billboard
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