ZYNC Music Group has filed a lawsuit against Round Hill Music Royalty Fund II LP (Round Hill Music / RHM) in the United States District Court for the Southern District of New York.
The complaint, filed on Monday (May 13) and obtained by MBW, accuses Round Hill Music, which is led by co-founder and CEO Joshua Gruss, of “egregious and numerous breaches” of their joint venture agreement, which was terminated in 2022.
New York-based Round Hill acquired a stake in ZYNC Music in a multi-faceted agreement back in 2017.
Zync Music, which runs offices in London, Nashville, LA and New York, is a music licensing and publishing company that specializes in music synchronization placements in film, advertising, television, trailers, sports, and video games.
Round Hill said at the time of its investment in the company that it planned to keep ZYNC functioning as an independent entity – and feed it repertoire to license on to media partners.
ZYNC was founded in 2002 by Sanne Hagelsten who then partnered with synch and publishing veteran Marisa Baldi (Universal Music Publishing, PolyGram Music Publishing, Maverick, Virgin) in 2003.
Since then, the company claims to have secured over 20,000 licenses and to have earned more than USD $100 million for its clients.
The complaint filed on Monday outlines numerous alleged breaches of the parties’ agreement by Round Hill Music, including its alleged failure to properly account to ZYNC, “gross misstatement” of income and expenses, and “unwarranted” withholding of payments due to ZYNC.
It alleges that Round Hill Music has failed and refused to pay over $5 million due to ZYNC.
Other allegations in the lawsuit include “bullying and mistreatment perpetrated by RHM and its senior leadership against ZYNC”.
ZYNC says in the lawsuit, which you can read in full here, that “over the past two decades, under the leadership of Marisa Baldi and Sanne Hagelsten,” the company “has earned a stellar reputation in the music publishing industry as a female-led premiere publishing company with strong personal relationships and professional ties to the licensing community as well as the artists, songwriters, labels, and publishers it represents”.
The lawsuit also alleges that “Round Hill sought to acquire ZYNC’s considerable assets and capitalize on ZYNC’s success and goodwill by entering into an agreement with ZYNC to bring ZYNC’s synchronization licensing expertise to Round Hill”.
Under their ‘joint tenancy’ arrangement, the ZYNC co-founders and co-CEOs Marisa Baldi and Sanne Hagelsten headed up the ZYNC and Round Hill combined synch team.
In 2019, Baldi also assumed the role of Chief Creative Officer of Round Hill Music.
Elsewhere in the complaint, ZYNC accuses Round Hill Music of “breach of contract, breach of the implied covenant of good faith and fair dealing [and] fraudulent inducement”.
ZYNC also seeks to remedy Round Hill Music’s alleged “wrongful conversion and retention” of ZYNC’s revenue and assets following the termination of their joint venture in October 2022, including the “continued exploitation of the joint venture assets” and the “willful infringement and dilution of the value” of ZYNC’s trademark.
“This action is intended to redress RHM’s egregious and numerous breaches of its joint tenancy agreement with ZYNC.”
Lawsuit filed by ZYNC Music Group
According to the complaint, “This action is intended to redress RHM’s egregious and numerous breaches of its joint tenancy agreement with ZYNC, including RHM’s flagrant failure to properly or timely account to ZYNC thereunder, RHM’s gross misstatement of the joint tenancy’s income and expenses in the limited accountings that were provided, and RHM’s unwarranted and bad faith withholding of, and failure to pay, millions of dollars unequivocally due to ZYNC pursuant to the parties’ agreement, and to put a stop to the bullying and mistreatment perpetrated by RHM and its senior leadership against ZYNC.”
“Round Hill Music denies the allegations in the complaint filed today by Zync Music Group.”
Round Hill Music spokesperson
A spokesperson for Round Hill Music told us in a statement: “Round Hill Music denies the allegations in the complaint filed today by Zync Music Group.
“The dispute between Round Hill and Zync Music Group is a commercial dispute over the valuation of their joint venture partnership which is going through a dissolution and subject to an appraisal process.
“The specious and salacious allegations of the complaint are being used by Zync as a substitute for the failing merits of its case.”Music Business Worldwide
