Pitchfork: Kindercore Founders Sue Parent Corporation

Kindercore Founders Sue Parent Corporation
Judge Judy finds both sides in contempt after listening to Masters Of The Hemisphere demos

[Posted Tuesday, December 2nd, 2003 06:00:00 Pitchfork Central Time]

The Kindercore implosion continues, and this time it's personal: just in time for Thanksgiving, Dan Geller and Ryan Lewis (the founders of the label) filed a lawsuit against Kindercore's parent company, IDEA, its CEO, Stanley Hartman (he's the one we accused of not being very good at math in our last Kindercore update), and even former label manager Jerod Gunsburg, alleging a wide range of malfeasance, including breach of contract, libel, slander, restraint on trade, unjust enrichment, unfair competition, breach of fiduciary duties, intentional and negligent infliction of emotional distress, and our personal favorite: "promissory estoppel," which evidently has something to do with Hartman and Gunsberg supposedly promising Dan and Ryan all kinds of money they didn't end up getting.

Promissory Estoppel is also the name of the Pitchfork house band which plays, for a modest fee, on holidays and other special occasions, a very special blend of polka and death metal. You have to see it to believe it (actually, just believe it).

The suit, which Pitchfork was able to obtain for closer inspection, makes a whole lot of allegations against Gunsberg and Hartman, many of which seem more appropriate for the schoolyard than the courthouse, but which nevertheless constitute a thirty-page indictment of IDEA and Telegraph's conduct of Kindercore business over the last two years. There are, all told, twenty-one causes of action brought by Geller and Lewis, along with a lengthy recounting of the messy history of their relationship with IDEA and Telegraph.

According to the lawsuit, Gunsberg and Hartman approached Lewis and Geller in the summer of 2001 with a proposal for a partnership between Kindercore and Telegraph, which came to fruition in March 2002. Under the terms of the deal, Geller and Lewis would each retain a 41% stake in Kindercore along with modest salaries, with Telegraph assuming an 18% share of the label. For their part, Hartman and Gunsberg would receive a significant amount of financial control in the retooled label. Apparently, Geller and Lewis later agreed to cede exclusive control of Kindercore operations to IDEA, apparently under pressure from Hartman. Geller and Lewis were promised continued salary as well as functioning in an A&R; capacity for the retooled Kindercore.

In the lawsuit, Geller and Lewis allege that IDEA never paid their salaries or A&R; expenses. The allegation of fraud seems to go hand in hand with this, since it seems that Lewis and Geller are pretty convinced that this stuff happened on purpose, because Hartman and Gunsberg had a plan, or as the legal document puts it, they were making promises "with the intent to defraud and deceive." There's also a really weird allegation buried way down in the middle of the complaint about Hartman "selling out-of-print copies of a CD by the band 'Kings of Convenience' on eBay, in violation of the termination agreement between Kindercore NY and Kings of Convenience."

The juiciest accusations, though, concern libel, slander, and the intentional and negligent infliction of emotional distress, and this is where you start to wonder how anyone can really come out a winner in this messy fight. Here is where the mud really gets slung. In the suit, Lewis and Geller allege that Hartman and Gunsburg "falsely stated to current and prospective business contacts, as well as to individuals in the tightly knit music industry, that Plaintiffs Lewis and Geller were dishonest and incompetent." In another section, Lewis alleges that Hartman called Lewis' father in December 2002 and "made many defamatory remarks regarding plaintiff Lewis, including but not limited to impugning Lewis' honesty and asserting that Lewis was a substance abuser," and Gunsberg (in May, 2003) emailed Lewis' father to let him know that his son was "very sick," a "con man" and a "shakedown artist." Elsewhere in the suit the defendants are accused of variously referring to Lewis as "a cheat, a liar, and a 'chronic drunk.'"

Geller and Lewis accompanied this lawsuit with a pretty widely-circulated press release, expressing Geller's surprise at the news of Kindercore's closing on November 14th, and a certain sense of disappointment that their own role in the creative development of the label had been marginalized to the point of non-existence. The press release ends with Ryan Lewis saying that "bringing this legal action was the last thing we wanted to do, but we felt that it was the only thing we could do to help the friends and artists who had faith in use when we entered into this arrangement with Telegraph." The press release also mentioned the establishment of a legal fund to help offset the "tremendous costs associated with furthering this action." We gave both Lewis and Geller the opportunity to comment for this story, but both declined on advice from their attorneys.

Gunsberg, though, seems to feel that he has nothing to lose at this point, given that he no longer seems to have any connection with Kindercore or IDEA, and thus, apparently, no money or really anywhere to live, as a result of recent developments. "I am no longer an employee of IDEA/Telegraph/Kindercore," Gunsburg wrote Pitchfork. "I was given no severance pay, evicted from my home (because it also served as the office), and forced to pay Kindercore bills out of my own pocket because some vendors were people with whom I have close personal and professional relationships... I was discharged from IDEA because my work was not generating enough for the bottom line, [yet] I am being accused by Dan Geller and Ryan Lewis for 'unjust enrichment.' If someone can explain all of this please call me. Oh wait, they can't because after tomorrow I won't have a phone."

"I have made it repeatedly clear to Dan Geller and Ryan Lewis' attorney, Quinn Heraty, that I will do whatever I can to help them in their action. At this point, I am interested in moving on and focusing on some core issues, like food, shelter, and employment and will do whatever it takes to avoid dealing with a lawsuit that I have no ability or desire to fight," Gunsburg elaborated.

We went outside the immediate Kindercore family to take the temperature of some of the interested parties and we got an interesting range of opinions. Britt Myers, producer of Dressy Bessy and Palomar, amongst others, had nothing but good things to say about Gunsberg, and expressed great regret that things had come to such a pass as this. As he put it, "This lawsuit is about people who have no money suing other people that have no money." Someone close to another fairly high profile former Kindercore act commented that the Kindercore team were "smart people and great to work with," adding that "there is no doubt that Jerod was doing the Kindercore thing for music's sake, and nothing else." Man, this is a story we'll never get sick of!