Bad Debt Hurts Brand Image (or does it?)

Posted by | February 22, 2011 | General | No Comments

Hollywood, Esq. (formerly THR, Esq., when or why the change, I’m unsure) reported today that George Clinton’s “former law firm,” Hendricks & Lewis, seeks to garnish the performer’s wages to pay off the debt he owes the law firm for its legal work.  (Someone might want to tell the folks who handle Hendricks & Lewis marketing that Clinton’s a former client, as the firm’s website still describes the firm’s work for him in the present tense — oops!)

According to the Hollywood, Esq. post, George Clinton won fame for his funk music, and notoriety for “perusing an estimated 800 musicians and record labels for illegally sampling his hit songs.”  In fact, the godfather of funk recently filed suit against 13 record labels and individuals, including, Fergie and the other members of the Black Eyed Peas, alleging copyright infringement for unauthorized use of the original sound recording “(Not Just) Knee Deep” in the Black Eyed Peas songs “Shut Up Remix” and “Shut the Phunk Up Remix.”

George Clinton’s prolific career is evident by the 781(!) copyright registrations in his name; with that level of protection, a significant level of enforcement is to be expected (gotta recoup all those legal fees somehow, perhaps through statutory damages presuming Clinton’s registrations were timely).

But back to the real story of Clinton’s failure to pay his legal bills.  Hendricks & Lewis apparently represented Clinton from 2005 to 2008.  As described by Hollywood, Esq., while representing Clinton, the Hendricks firm filed:

[framed_box]cases against Capitol Records, Universal Music Group, and a host of cases known as “The Bridgeport Litigation,” 476 separate actions that sought declaratory judgment, injunctive relief, and damages from some 800 defendants in the music business for copyright infringement.[/framed_box]

The law firm withdrew as Clinton’s counsel in 2008 and took its fee dispute to binding arbitration in accordance with the fee agreement between Clinton and the firm.  On February 2, 2010, the American Arbitration Association (AAA) awarded Hendricks & Lewis $1,675,639.82, plus post-judgment interest at .38 percent from the date of entry of the order in federal district court.  The United States District Court for the Western District of Washington issued an order confirming AAA’s judgment on May 27, 2010.

On October 12, 2010, the Clerk of Court for the US District Court for the Western District of Washington Certified the Judgment against George Clinton for registration in another jurisdiction (can you guess where?).  If you guessed that pending copyright infringement case George has against the members of the Black Eyed Peas and their labels, well, you’re right!  Hendricks and Lewis have dibs on any monetary award recovered in that case, by virtue of the fact that they filed a Notice of Judgment Lien claiming $1,634.448.09 (why the discrepancy, I don’t know), plus interest through 12/10/10 and $16.99 per day for each day thereafter.  Meanwhile, Hollywood, Esq. reported that the law firm also seeks to

[framed_box] garnish Clinton’s wages via a checking or savings account at Wells Fargo.  Late last week, the firm submitted paperwork for the garnishment, which includes owed legal fees, court costs, and interest in the total amount of $1,633,594.68.[/framed_box]

Now, I don’t know about you, but knowing that George Clinton stiffs his lawyers doesn’t make me want to go out and support him and P-Funk, no matter how hard they rock (and let me tell you, having seen them perform live, I know they rock!).  While this fee dispute probably won’t affect George Clinton’s music-related sales, much beyond a few lawyers, the point is that it could.

Brands are emblematic of the relationships we have with those who purchase what we’re selling.  Anything that reflects negatively on your brand can harm those relationships, causing you to lose goodwill and ultimately, business.  Pay your bills.  Especially your legal bills!

About Lara

Lara Pearson is a trademark attorney with Exemplar, where she also serves as the firm's Sustainability Steward. Lara's legal practice focuses on trademark and copyright law, including: intellectual property audits; trademark search & clearance; trademark and copyright registration & maintenance; intellectual property transfers; transactional work; and dispute resolution, including litigation when necessary. Lara primarily represents other social enterprises -- those leveraging their businesses and brands as catalysts for positive social and environmental change. Such businesses engage in CSR (Corporate Social Responsibility) to have a positive "triple bottom line" of people, planet and profit. As Exemplar's Sustainability Steward, Lara works with others in her law firm to measure and reduce the firm's carbon emissions and encourage engagement in social responsibility initiatives, including pro bono legal work and volunteering. Lara is a proud member of the Social Venture Network. Brand Geek is a member of 1% for the Planet and a Certified B Corporation, whose Incline Village office is certified under the regional Keep the Sierra Green program. Exemplar Companies is the most innovative professional services firm in the New Economy. Our unique, diversified expertise spans the disciplines of corporate law, business advisory, and capital/investment banking to better meet the needs of our high-potential customers. We have assembled a comprehensive suite of service to meet the complex issues facing companies in today’s challenging business environment. Our unique, holistic approach ensures the growth and success – and greatly increases the competitive advantage - of our customers. The Exemplar team is comprised of knowledgeable, highly skilled experts in a wide range of industries and disciplines. They work closely with our customers to provide trusted advice, incomparable support, expert guidance and the ultimate competitive advantage as they accelerate their businesses and position themselves to transform industries.

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