Modular founder Steve Pavlovic confirms BMG is dropping its lawsuit.

After being named in a lawsuit that claimed Tame Impala had not been paid due mechanical royalties, Modular Recordings founder Steve Pavlovic has given his side of the story to Billboard and said that BMG are set to drop court proceedings.

BMG issued the lawsuit for $450,000 earlier this month, naming Universal Music Australia and Modular among others. Universal denied all responsibility for the payment of the band’s royalties, claiming that Pavlovic was responsible.

“We’ve been in discussions with BMG for some time to resolve what mechanicals royalties Modular owes to BMG in regards to Tame Impala,” Pavlovic told Billboard.

“The issue arose out of an unfortunate misunderstanding due to their being different ways of calculating and paying mechanical royalties in the U.S. compared to the process we were used to in the U.K. and Australia. We didn’t realize that the different statutory process in the U.S. required Modular to deduct and pay the artists’ mechanical royalties directly,” he continued.

“I’m pleased to say though that in the last week we’ve been able to establish the payment actually due. Incidentally, my share is a fraction of what has been reported in the press. I believe with the sums now allocated to Modular and Universal the accounting can be settled quickly and therefore BMG are prepared to withdraw the case.”

Though everything has been settled with BMG, Pavlovic is still involved in a dispute with Universal, who have been attempting to acquire his shares in Modular since 2013.

“After months of negotiating the settlement agreement which sorted out all of the issues between us I deliberated about signing and then thought better of it at the last minute,” he explained. “I had felt bullied into agreeing the terms and then got my second wind and stood up to say ‘no’. Universal claimed that I agreed to sign and that this was legally binding and that therefore the deed is in effect.

“A deed is a solemn document and it has always been my understanding that for a deed to bind a person, they have to actually sign it. It seems illogical to me that someone cannot have the right to deliberate about executing a document, especially one that they feel pressured into signing. As the proceedings are still live I unable to say much more than this.”

Pavlovic also elaborated on the situation that caused him and Modular to part ways.

“I have no choice but to walk away from a company that I founded 18 years ago,” he said. “I took the risk and invested my own money to see [Modular artists] reach a broader audience. But at the end of the day that company was me. I created it. You can take me out of Modular but you can’t take the things that made Modular successful out of me.” [via Pitchfork]





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