2:11pm PT by Eriq Gardner
Jeff Berg's Resolution In Court Over Ex-COO's Severance (Exclusive)
Resolution Entertainment agreed to pay music agent Jeff Franklin $1.15 million to walk away, but there's money owed, according to a lawsuit from the talent agency's former COO.
When Jeff Berg launched Resolution in 2013 after three decades at ICM, Franklin became one of his top lieutenants. But the relationship ended this past June.
Less than two months later, Franklin and his Another Time, Inc. company sued the talent agency for allegedly breaching the terms of a written agreement executed at the time of his departure. According to court papers, Franklin was to be paid a total of $150,000 in five monthly payments as severance, plus be paid an additional $1 million for his ownership shares of the talent agency.
In Franklin's lawsuit, he claims that Resolution made the first June severance payment, but missed the July one. He further claims that Resolution made the first payment of $250,000 for the shares, but the remaining balance remains due. As such, he alleges he's suffered damage in excess of $870,000.
"We don't believe there's any basis for this lawsuit," responds a spokesperson for Resolution.
The agreement between the parties was supposed to remain confidential, but was attached to the complaint in LA Superior Court.
Among the interesting provisions is that Franklin's company and Resolution agreed to split commissions from Outlaws guitarist Richie Blackmore, Patti LaBelle and Foreigner singer Lou Gramm. Both Resolution and Franklin, though, aren't going to split commissions from "Blackstone" -- likely, the private equity firm Blackstone Group -- in a film finance transaction involving Sony. (No details about this potential deal are given.)
The parties have waived a non-compete, but Franklin agreed not to hire any Resolution employees for six months.
As part of the agreement, Resolution also represented to Franklin that it wasn't (as of early June) engaged in any negotiation for the sale of its business.
Finally, the lawsuit might not be long for the courts. Even if Franklin doesn't get the owed money, the severance agreement appears to have an arbitration provision that would likely be exploited by Resolution when it comes time to file a response.