Sony Music alleges it was defrauded of millions of dollars when Rdio, the streaming service backed by former Cumulus CEO Lew Dickey, sold to Pandora then filed for Chapter 11 bankruptcy.
Six years ago, Sony and Rdio signed a licensing deal came that enabled Rdio to use music from its library. Billboard reports that by the end of 2014 Rdio owed Sony $5.5 million and approached the label to renegotiate the content agreement and defer that payment, which SONY agreed to. The complaint states: “Unbeknownst to SME, however, at the same time that Rdio was negotiating the amendment to its Content Agreement with SME, it was simultaneously negotiating its deal with Pandora — under which Rdio would file for bankruptcy.”
The complaint filed in New York federal court targets Rdio chief executive officer Anthony Bay, Rdio general counsel Elliott Peters and Rdio senior VP in charge of content licensing Jim Rondinelli.