UPDATE
https://news.bloomberglaw.com/securitie ... ware-courtJourney Band Members’ Dispute Fast-Tracked in Delaware Court (1)
Jennifer Kay
A Delaware judge said Wednesday that he’d try to resolve a deadlock over Journey’s tour management before the classic rock band embarks on the Japanese leg of its tour this autumn.
It would be preferable, however, if longtime Journey keyboardist Jonathan Cain and the band’s sole remaining co-founder, lead guitarist Neal Schon, could resolve their dispute without intervention from the Delaware Chancery Court, Vice Chancellor J. Travis Laster said in a telephone hearing.
In the meantime, Laster said he would appoint a discovery facilitator to work with Cain’s and Schon’s legal teams ahead of a hearing scheduled the first week of September.
Cain alleges Schon’s lavish spending has sown discord within the band. According to Cain’s petition for a custodian, Schon blew a $1,500-per-night hotel fee cap, maxed out an American Express card with a $1 million limit, unilaterally chartered private jets, hired a close friend unnecessarily, and blocked efforts to pay the band’s debts.
Cain seeks a court-ordered custodian to act as a tie-breaking third board member at Freedom 2020 Inc., a business he founded with Schon in 2021 to oversee Journey’s tour-related assets. Each musician owns half the company and serves on its two-seat board. The current deadlock interferes with day-to-day operations and makes it impossible to make significant management or financial decisions, Cain said in his petition.
Deadlocks aren’t unusual in solvent corporations, Laster said, pushing the musicians’ attorneys to help their clients find a resolution together before the next hearing. “I hope you’re going to talk to them about the law and realize there’s a relatively narrow set of outcomes for this type of proceeding,” Laster said.
Schon co-founded Journey in 1972. Cain joined the band in 1980, replacing original keyboardist Gregg Rolie.
Sidney Liebesman of Fox Rothschild, representing Cain, said compiling discovery for the court shouldn’t affect the band’s tour, which is making its way around the US before heading overseas in mid-October. But the management situation regarding the tour’s expenses and budgets, the hiring and firing of crew members, and travel accommodations is “in crisis” and exacerbated by “unhinged” emails between the musicians, he said.
“The band seriously runs a risk of losing its business manager, losing its accounting firm, because this dysfunction is as bad as I’m trying to express to the court,” Liebesman said.
The band this week canceled the United Kingdom and Ireland leg of their tour, which was set to occur after the Japan shows.
Schon denies there’s been any mismanagement or dysfunction, and some disputes described in Cain’s petition already have been resolved, said Jack Yoskowitz of Seward & Kissel, representing the guitarist.
Journey’s performances are “the only thing there’s no dispute about,” he said. “They go on stage.”
Laster said while he’s familiar with the band and their “fantastic repertoire,” he doesn’t know what happens behind the scenes to organize a tour “for an epic rock band like Journey,” and there were some aspects of the bandmates’ argument that shouldn’t involve him.
“I’m not qualified to decide who the drummer ought to be,” he said.
“That’s not what we envision at all,” Liebesman replied, adding that’s one issue already resolved.
Schon also is represented by Prickett Jones & Elliott.
The case is Cain v. Schon, Del. Ch., No. 2024-0791, hearing 8/7/24.
(Updates with additional comments from court hearing.)