Are Copyright Shares to Songs by Destiny's Child and Lady Gaga About to Be Auctioned?

Lady Gaga - GETTY - H 2016
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A legal quarrel over the discovery of pop superstar Lady Gaga has evolved into a fight over whether some prized copyrights will be put up for auction, including one of Beyonce's biggest hits, "Bootylicious," recorded when she was a member of Destiny's Child.

The drama centers on Rob Fusari, a Grammy-winning songwriter, who before producing the Lady Gaga songs "Paparazzi," "Beautiful, Dirty, Rich," "Again Again," "Brown Eyes" and "Disco Heaven," had co-written chart-toppers for the likes of Will Smith, Whitney Houston, Kelly Rowland and others.

A few years ago, Fusari became embroiled in a battle with Wendy Starland, who claimed she was tasked to find the next young female musical superstar. She delivered Lady Gaga, and when Fusari allegedly broke an oral agreement, Starland sued. In November 2014, Starland won a $7.4 million trial verdict. Last September, a federal court vacated the judgment and granted a new trial, but not before Fusari filed for bankruptcy.

Last month, Fusari and all of his creditors gathered before a New Jersey bankruptcy judge, and after six hours of settlement talks, the parties told the judge that a deal had been reached. According to court papers, Starland was to get $3.2 million, with other administrative creditors getting about $900,000 in fees and expenses.

However, a problem arose.

Fusari was going to raise about $450,000 for the settlement by having his brother, Mark Fusari, refinance a home mortgage that he held. After the settlement was announced in court, his brother indicated an unwillingness to do so, which led Starland to take swift action.

On April 12, she brought a motion to direct the bankruptcy examiner to sell the property of Fusari's estate to meet his obligations under the settlement agreement. To cover the $450,000 shortfall, she demanded that Fusari's interest in dozens of copyrighted songs be put up for auction. Among the songs included are the Lady Gaga ones noted above, Rowland's "Train on a Track," Houston's "Love That Man," as well as "Bootylicious," "DC — Thank You," "Happy Face" and "Apple Pie a la Mode" from Destiny's Child.

The proposal is now generating controversy.

On Tuesday, Fusari's attorney submitted an objection that questions whether the parties really arrived at a valid contract last month to settle claims. He makes the argument that there was no "mutual assent" on key terms, including "when the $450,000 Mortgage refinance could be completed." If a contract was formed, the attorney argues it must be voided as a "mutual mistake."

Separately, Sony/ATV also lodged an objection yesterday, calling the judge's attention to the fact that in its music publishing agreement with Fusari, it was conveyed one-half of Fusari’s ownership and copyright interest in various compositions (recorded by Destiny's Child, Monica, Billy Jean, Gloria Gaynor, etc.) and given the exclusive right to administer and commercially exploit them. Fusari gets profit participation, but Sony/ATV argues that its Fusari agreement can't be sold because it's a personal service contract that depends on the assurance of Fusari's future performance. Additionally, Sony/ATV says its consent is necessary for assignment and at least wants "adequate protection of its ownership rights and interests in and regarding the Compositions."

If Starland manages to clear these hurdles, the public could get a chance to own Fusari's 12.5 percent interest in "Bootylicious."