A lawsuit by Daryl Hall over John Oates' plan to sell his share of the Hall & Oates duo's joint venture without the other’s permission headed Thursday to court, where a judge will decide whether to keep pausing the deal.
Chancellor Russell Perkins in Nashville said he would rule Thursday on whether, and how, to extend the pause on the sale of Oates’ share of Whole Oats Enterprises LLP to Primary Wave IP Investment Management LLC, while the music duo moves through the early stages of arbitration.
The joint venture in question includes Hall & Oates trademarks, personal name and likeness rights, record royalty income and website and social media assets, according to a court declaration by Hall, who has called Oates' planned sale the “ultimate partnership betrayal. ″
Christine Lepera, an attorney for Hall, said she hasn't heard anything from Oates' legal team indicating that there's some urgency in closing the deal.
"You cannot sell half of a partnership to a third party without the other party’s consent, and that’s just intuitively correct,” Lepera said.
An attorney for Oates, Tim Warnock, said Hall's claims that Oates went behind his back are untrue.
“Mr. Oates proceeded exactly as he was allowed to proceed,” Warnock said, pointing the judge to their joint business agreement, which remains under seal in the case. "Mr. Hall could have done the exact same thing himself.”
The hearing also drew attention to Hall's claims in his declaration — that Oates blindsided and betrayed him, that their relationship and his trust in his musical partner have deteriorated, and that Oates timed the sale when Hall was about to go on tour to maximize the harm to him. Neither Hall nor Oates attended Thursday’s hearing.
Warnock said some of the “salacious” allegations in Hall's declaration have nothing to do with what was being discussed in court Thursday.
“Maybe he wanted publicity, maybe he wanted to interfere with Mr. Oates’ business relationships," Warnock said. "We won’t know the answer to that today. We will know the answer to that at some point and there will be consequences about that.”
Lepera replied that Hall had to submit an affidavit to support why the judge should keep temporarily blocking the deal.
“That's the reason we did that, and not for publicity,” Lepera said.
The judge issued a temporary restraining order on Nov. 16, the same day Hall filed his lawsuit, writing that Oates and others involved in his trust can’t move to close the sale of their share until an arbitrator weighs in on the deal, or until the judge’s order expires — typically within 15 days, unless a judge extends the deadline.
The parties have since agreed on who will oversee the arbitration, where the dispute over the deal will be decided, the attorneys said.
The lawsuit contends that Hall opened an arbitration process on Nov. 9 against Oates and the other defendants in the lawsuit, Oates’ wife, Aimee Oates, as well as Richard Flynn, in their roles as co-trustees of Oates’ trust. Hall was seeking an order preventing them from selling their part in Whole Oats Enterprises to Primary Wave Music. Hall's declaration says he learned about the proposed deal for the first time on Oct. 20, about a week before he would begin touring across the U.S. west coast, Japan and Manilla.
Primary Wave has already owned “significant interest” in Hall and Oates’ song catalog for more than 15 years.
The lawsuit says Oates’ team entered into a letter of intent with Primary Wave Music for the sale and alleges further that the letter makes clear that the music duo’s business agreement was disclosed to Primary Wave Music in violation of a confidentiality provision. Additionally, Hall said in his declaration he would not approve such a sale and doesn’t agree with Primary Wave’s business model.
