TikTok rival Triller is as soon as once more dealing with a lawsuit over allegedly unpaid music licensing charges.
This time, the music group suing Triller is Merlin, the digital music licensing group for indie labels, distributors, and different rightsholders.
In a criticism filed on Thursday (March 27) within the US District Court docket for the Southern District of New York, and obtained by MBW, Merlin alleged that Triller violated a licensing settlement the 2 had signed in 2020.
In response to the criticism, that settlement included a “most favored nation (MFN)” clause that requires Triller to make up the distinction to Merlin if it supplied greater licensing charges to a different music firm.
Merlin says it discovered by way of a earlier lawsuit in opposition to Triller (filed in 2022) that the short-form video platform had supplied greater charges to a different report firm.
Merlin’s criticism doesn’t establish that different music firm, however it seems to be Sony Music Leisure, which sued Triller in August of 2022 alleging non-payment of “tens of millions” of {dollars} in licensing charges for Sony-owned music used on the platform.
Sony and Triller ultimately got here to an settlement below which Triller agreed to pay the music firm $4.57 million, however in the middle of the lawsuit, Merlin evidently discovered that Triller had given Sony a greater licensing deal than it had signed with Merlin. This meant that Triller was now on the hook to pay the distinction to Merlin.
Merlin and Triller “got here to an understanding” that the previous owed the latter $2.55 million, however Triller by no means made the fee, Merlin’s criticism alleges.
The criticism additionally alleges that Triller reneged on one other a part of its settlement with Merlin. As a part of the 2020 licensing settlement, Triller gave Merlin a warrant for a certain quantity of its inventory – that means it gave Merlin the precise (however not the duty) to purchase a certain quantity of Triller inventory at a sure set value.
“Merlin has nonetheless not obtained info relating to how Triller intends to deal with the matter. Merlin was promised new warrants in November, and Triller has but to ship these warrants.”
Merlin, in a authorized criticism in opposition to Triller
Merlin alleges that its settlement with Triller required the social media platform to honor that warrant even when the corporate had been offered or merged with one other agency.
And Triller did certainly undergo a merger. After quite a few failed makes an attempt to get listed on the inventory market, Triller lastly succeeded final 12 months by means of a merger with AGBA, a Hong Kong-focused monetary companies agency.
The newly merged Triller Group started buying and selling on the NASDAQ in October. Merlin alleges that its warrant for Triller inventory ought to have been transformed to a warrant for an equal quantity of inventory within the new Triller Group, however that didn’t occur.
“Triller… did not adjust to the phrases of the warrant, together with by failing to verify, in a written instrument, that the successor firm to Triller Maintain Co LLC would assume the duty to ship to Merlin such models, securities or belongings that Merlin is entitled to pursuant to the warrant,” states the criticism, which may be learn in full right here.
“Merlin has nonetheless not obtained info relating to how Triller intends to deal with the matter. Merlin was promised new warrants in November, and Triller has but to ship these warrants.”
The lawsuit asks the court docket for $2.55 million in licensing charges plus curiosity, and for the court docket to order Triller to honor the warrant Triller had given Merlin, or in any other case to award damages for failure to take action.
The Merlin lawsuit is the most recent in a rising collection of lawsuits in opposition to Triller, which evidently skilled monetary issues earlier than its merger with AGBA final 12 months.
In addition to the Sony lawsuit, Triller was additionally sued by Common Music Group in 2023 over unpaid licensing charges. Extra just lately, a hedge fund owned by funding supervisor Yorkville Advisors sued Triller over an allegedly unpaid debt of $33.5 million. That debt had evidently been taken on by AGBA, the opposite firm in final 12 months’s merger.
In a submitting with the Securities and Alternate Fee in early 2024, forward of a proposed IPO, Triller disclosed that it owed greater than $23 million in unpaid music licensing charges.
As a part of the merger, the brand new Triller Group put aside 50 million shares to be “utilized towards future settlement of sure Triller authorized and monetary obligations.” When Triller Group started buying and selling final October, these shares would have been value $222.5 million.
Triller additionally secured $50 million in an fairness funding spherical in January that was led by KCP Holdings, which acquired $14 million value of Triller Group fairness at $2.20 per share.
Triller inventory was buying and selling $0.64 per share as of mid-morning on Monday (March 31).Music Enterprise Worldwide
