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Written by guest blogger,  Joshua Johnson 

Producer/songwriter Rob Fusari recently filed a $30.5 million lawsuit against Team Love Child, LLC and Mermaid Music, LLC, two companies co-owned by the Grammy Award-winning pop star, Stefani Germanotta, professionally known as Lady Gaga, currently a ladygaga very popular and controversial pop artist.

The complaint alleges that Lady Gaga “froze” him out of her career and is reneging on  their business arrangement despite the fact that he played a pivotal role in launching her career in the early years – i.e., co-writing songs, creating her stage name, and helping her obtain her record deal with Interscope Records. Specifically, the suit alleges claims of breach of contract and fiduciary duty.

In the facts, Fusari claims to have worked with Germanotta for  several months in “radically reshaping her approach” as an artist, shifting her from rock to dance-pop. While Germanotta and Fusari were co-writing important songs like "Paparazzi" and "Beautiful, Dirty, Rich" for her debut album, Fame, Fusari would greet Germanotta with his rendition of Queen’s “Radio Ga Ga.”

According to the lawsuit, this is how Lady Gaga’s name was created:

“One day when Fusari addressed a cell phone text to Germanotta under the moniker ‘Radio Ga Ga,’ his cell phone’s spell check converted ‘Radio’ to ‘Lady.’ Germanotta loved it and ‘Lady Gaga’ was born.”

In response to this claim, Germanotta, stated:

"The realization of Gaga was five years ago, but Gaga’s always been who I am…I always dressed like that before people knew me as Lady Gaga. I was always that way…I stuck out like a sore thumb."

The lawsuit further claims that Lady Gaga and Fusari’s relationship turned romantic and then ultimately became a business partnership in May 2006. It was around this time that they created Team Love Child, LLC. In the formation of this joint venture, Fusari and Germanotta agreed to allow Fusari to collect producer fees in addition to 20% of the earnings from Germanotta’s first four albums. While Fusari acknowledges that he received checks totally rob_fusari--300x300approximately $611,000, he nonetheless claims that he has been denied what the Team Love Child, LLC agreement entailed. Essentially, the lawsuit is mainly fighting for the aforementioned agreement.

Last month, Germanotta’s attorneys fired back at Fusari by filing a second lawsuit in Supreme Court of the State of New York. The suit claims that the Team Love Child, LLC contract with Fusari should be deemed null and void because, among other things, Fusari forced Germanotta into the agreement. Supporting argument include that the agreement violates employee protection laws that prevent "predatory and financial abusive practices by employment agencies” and that Fusari is attempting to collect “unlawful compensation.”

Alternatively, if the court does not nullify the agreement, the complaint seeks a declaration that Fusari is only entitled to a percentage of net compensation, that he is not entitled to a percentage of merchandising income, and that he Lady Gaga is not required to use him to produce future albums.

This case is ongoing and Fusari’s answer in the latter case has not yet been filed.

The Lady Gaga complaint can be downloaded here.

Joshua Johnson Josh is a Knoxville, Tennessee native who attends Belmont University’s Mike Curb School of Music Business.  He is currently a student in Mr. Shrum’s Entertainment Law & Licensing class.  Upon graduation in May 2010, he and his wife, Nicole, plan to devote all of their efforts in pursuit of their music career as folk/pop duo, Elenowen.

By all accounts, EMI’s Grammy party at the Hollywood “W” Hotel was impressive.  But one there was one significant absentee from the celebration:  Guy Hands, Chief Executive of Terra Firma, the inhands vestment that purchased EMI in 2007.

EMI is a British company with a 113 year history of making music.  Globally, EMI is home to such well-known acts as Coldplay, Norah Jones, Snoop Dog, The Spice Girls, and even, yes, the Beatles.  EMI’s Nashville-based labels are home to, among others, the Nashville’s successful talent, such as Lady Antebellum, Darius Rucker, and Keith Urban, not to mention old faithfuls such as singer-songwriter, Guy Clark, while the Nashville-based publishing arm of EMI is home to Tom Shapiro, John Paul White and Steve McEwan, to name a few.  And then, there is the Nashville-based Christian side of the business, EMI’s Christian Music Group.   Despite these success stories, in the days following the extravagant Grammy celebration, events transpired which called into question the financial stability, nay, even the very future, of those organizations as separate entities.

The winds of change started blowing way back in 2007, when the struggling entertainment empire was purchased by Hands and his citi1 venture capital firm, Terra Firma, for somewhere around 6.5 billion U.S. dollars.   The VC firm had a reputation for turning around troubled companies, including a roadside gas station company, an aircraft-leasing business, Australian cattle ranches, and a natural-gas network.

Some of the $6.5 billion purchase price was funded by the investment group, but the remaining balance, somewhere in the range of 4 billion, was financed by Citigroup.  Citigroup’s agreement to lend out that much money was contingent upon performance level targets.  The current consensus is that, despite over 13 million in sales of the old Beatles catalog, EMI has failed, and will continue to fail, to meet the performance targets, unless Terra Firma comes up with additional $200 million in capital contributions by the end of the summer.  If that doesn’t happen, Citigroup, itself struggling from the weight of bad debt and government scrutiny, could take the keys to the company and then, likely flip it into the waiting arms of Warner Music CEO, Edgar Bronfman, who has long wanted the EMI proGUY-HANDS perties, changing the landscape of the music industry.

It is rumored that when Hands first met the EMI executive team, he told them if he didn’t make the deal work, he would lose over $310 million.  So, for obvious reasons, Guy Hands didn’t attend the recent EMI soirée, choosing instead, I imagine, to remain in his lavish estate on the Isle of Guernsey in the English Channel, where taxes are almost non-existence, making it a popular financial center for British venture capitalists.  Regardless of where Hands is now,  however, this entire power struggle will likely play out by the end of the summer.