9:01am PT by Eriq Gardner
Roc Nation Sues Insurer for Not Paying Up After Death of Maroon 5's Manager
Roc Nation is now in court and blasting its insurer for stalling on making good on a $12.5 million "key man" insurance policy covering the death of Jordan Feldstein, the founder of Career Artist Management who died in 2017 of cardiac arrest.
Feldstein managed Maroon 5, among many acts. His association with the band dated to a lifelong friendship with Adam Levine, the group's lead singer. In 2016, Roc Nation acquired Feldstein's CAM and sought to protect its investment by purchasing insurance policies on Feldstein's life through HCCI International Company.
According to a lawsuit filed in New York federal court, ever since Feldstein died in December 2017, the insurer has "unreasonably delayed, stalled and engaged in coverage gamesmanship," ultimately denying a claim based on interpretations of a "shoddily drafted" policy containing "multiple ambiguities."
Roc Nation, now co-owned by Jay-Z and Live Nation, says it expected that its partnership with CAM would result in tens of millions of dollars, and that Feldstein's death had a tremendous impact on CAM's business. As a result of Feldstein's passing, Roc Nation lost Maroon 5 and estimates the death caused "more than three times" the $12.5 million policy limit when expected profits are factored.
A timely proof of loss has been submitted, continues Roc Nation, adding that it has promptly responded to document requests including information related to "false media reports."
The dispute, like most wars over insurance coverage, now focuses on the language of the policy.
Roc Nation says that HCCI has left several key terms without definitions, and when it comes to coverage of "direct ascertained loss," the insurer is seizing upon a provision that allows the subtraction of revenue generated by the insured.
In HCCI's eyes, according to Roc Nation, the insurer is allowed to deduct revenue generated by Feldstein without temporal limit even though Roc Nation claims the mantle of being the "insured."
"HCCI’s interpretation of the limitation clause ... invokes an outrageously unrealistic view of what can be accomplished by a dead person because HCCI is claiming that all CAM revenue forever is 'generated as a result of' Mr. Feldstein and that simply is not reality in the artist management business," states the complaint. "Talent needs constant attention and HCCI’s position in this case diminishes the value of many hardworking people who work to keep an artist’s career moving forward on a daily basis."
Roc Nation asserts that the limitations clause is "neither clear, unambiguous nor specific," that HCCI had a duty to spell out how this would work and that the interpretation should now be deemed in the music company's favor.
HCCI has made an advance payment on the $12.5 million of nearly $1.2 million, but is drawing the line on paying anything more.
A judge is now being asked to assess the insurer's contention of being able to make deductions on the $12.5 million policy, including post-mortem revenue "associated" with Feldstein's lack of participation over the expected term of the partnership. According to Roc Nation, the better way to assess financial losses under this "key man" policy would be to ask, "[W]hat would Mr. Feldstein’s continued involvement in CAM have meant to Roc Nation financially?”
Roc Nation, represented by attorneys at Reed Smith, is seeking both compensatory and punitive damages.