This could get messy : peter Hook to sue New order for millions over unpaid royalties
Peter Hook is to suing his former bandmates for “many millions of pounds” in the High Court. Hook claims to be owed over two million pounds due to ‘the underhand tactics of his “former friends” – Bernard Sumner and Stephen and Gillian Morris’ and accuses them of secretly “pillaging” the group’s name and starving him of cash.
He claims they have asset stripped the New Order name, keeping him in the dark about what they were up to until the move became a “fait accompli”.
A new company the trio set up without telling him has generated an income of £7.8 million in four years – but Mr Hook is getting just a tiny fraction of that, the court heard.
And his barrister, Mark Wyeth QC, said: “It was as though George Harrison and Ringo Starr had got together at George’s house one Friday night and had acted together to divest Paul McCartney of his shareholding in the Beatles, and didn’t tell Yoko about it either.”
Nick WilsonThe current New Order line-up – Bernard Sumner, Gillian Morris, Stephen Morris, Tom Chapman and Phil Cunningham.
Mr Sumner and the Morris’s insist they have treated Mr Hook, who last played with the band in 2007, fairly and that his stake in the band’s royalties is reasonable.
They say his campaign will achieve nothing – apart from threatening all of them with “potentially disastrous” lawyers bills of close to £1 million.
However, Judge David Cooke has now cleared Mr Hook of acting out of “spite” and opened the way for him to pursue his complaints to a full trial.
The court heard the former bandmates are now so estranged that they cannot even agree whether New Order “split” or the bassist just “left”.
The judge said there had been “vitriolic criticism on both sides” – but rejected claims that Mr Hook’s “true motive” was to get back into the band.
Jon BaxterNew Order’s Stephen and Gillian Morris
The case hinges on events in 2011 when Mr Sumner and the Morris’s formed a new company – in secret Mr Hook claims.
All agree that he was not present when the other three resolved to licence the use of the New Order name to the new company for 10 years.
Mr Hook, who now performs with his son in the group Peter Hook and the Light, says the move exiled him from his musical past and cost him a fortune.
The band has continued its phenomenal success without him since the new company – New Order Limited – was formed, said the judge.
Mr Hook is only receiving 1.25% of the band’s royalties and other income from merchandising and performances – but says he should be getting up to 12.5%.
Mr Wyeth said his former bandmates’ “clandestine” move had already cost him £2.3 million by October last year, and his losses are continuing.
The QC added: “Before the band, New Order, Mr Hook, Mr Sumner and Stephen Morris were in another highly successful band.
“They were stopped in their tracks by the suicide of their singer Ian Curtis but the legacy and catalogue of Joy Division and New Order are significant.
“We are talking about a major act who have a huge and important heritage.”
He added: “In so far as the Beatles had the Cavern Club in Liverpool, New Order had the Hacienda, in Manchester.
“This was not just a club, but the focal point of a musical movement, with New Order at the very tip of the spear”.
He told the judge the dispute is “not about musical direction or musical differences or personality clashes, but first and foremost about wrongdoers taking control of a company and stripping it of its property.”
The court heard the band members formed a company together, Vitalturn Company Ltd, in December 1992 “in the wake of the collapse of Factory Records.”
It was the “chalice” that held all of New Order’s musical and other rights, said Mr Wyeth, who added that about £1m-a-year is still being paid to Vitalturn in back catalogue royalties alone.
Mr Hook is a 25% shareholder in the company but was absent when the other three – who own 75% – decided to set up New Order Ltd.
They granted the new company worldwide exclusive rights to the New Order trade mark and the sources of income that go with it.
Mr Wyeth said that amounted to “a diversion of Vitalturn’s principle asset”, a move which was bound to have a dramatic impact on Mr Hook.
“This is a case about misappropriation of more than 20 years of good will and the valuable intellectual property, worth many millions of pounds, belonging to Vitalturn Company Ltd by three of its directors,” he told the judge.
Dubbing their behaviour “clandestine, premeditated and deliberate”, he claimed the three had “ignored the separate personality of the company and pillaged its assets”.
Mr Hook and others connected to the band were “kept in the dark and presented with a fait accompli,” he told the judge.
“Mr Hook seeks restoration of the company’s misappropriated property, property it has held for more than 20 years,” he added.
The QC denied Mr Hook is “somebody who is prone to difficult behaviour” or that he does not have the best interests of the band at heart.
He told the court: “Mr Hook was far from hostile to the commercial interests of a band he had been in for 25 or 30 years – he has been pushed into these proceedings.”
However, David Casement QC, for the band members, said they had acted “entirely reasonable” and described Mr Hook’s complaints as “completely misconceived”.