Music manager Scooter Braun, known for discovering Justin Bieber and making enemies of Taylor Swift, is embroiled in a legal battle with a former business partner over failed plans for a $750-million fund.
Peter Comisar, a Goldman Sachs partner and former Guggenheim Securities vice chairman, sued Braun, his company Ithaca Holdings and business partner David Bolno for fraud and breach of contract. The suit seeks more than $50 million in damages, according to a complaint filed in Los Angeles County Superior Court on Tuesday.
The litigation stems from a dispute over Scope Capital Management, a now dormant Los Angeles investment firm that the pair would co-own to exploit “the convergence of media, commerce and consumer brands and celebrity association,” according to the lawsuit.
Comisar, a veteran banker, alleged Braun tempted him away from his post at Guggenheim Securities in February 2017 with promises that he had deep-pocketed connections with moguls such as David Geffen who would invest in the fund. According to the complaint, Braun thought of Geffen as his godfather and said the famous music producer had been looking to invest $100 million with him.
Nearly a year after Comisar joined the company, tensions erupted. Comisar alleged that Braun stopped funding his salary and reneged on financial commitments, including supporting up to $7 million a year in fund expenses. Comisar said he had brought a team of professionals from Guggenheim Securities with him and Braun would not pay bonuses due to them.
Braun’s efforts to recruit investors such as Jimmy Iovine and Haim Saban were rejected, according to the complaint. The suit further alleges that Braun concealed raising funds from the private equity firm Carlyle Group to invest in another firm, Ithaca Holdings, which would compete with Scope Capital on investments in the entertainment industry. In April, Braun sold Ithaca Holdings for $1.05 billion to South Korea’s HYBE Co., which manages the K-pop group BTS.
Braun, who is seeking to resolve the dispute through arbitration, said in a court petition this week that Comisar’s claim is “unlawful, extortionate, and opportunistic.”
Braun said he invested $5 million, including financing Comisar’s $3-million annual salary, investments he said has now lost.
In his petition, Braun said Comisar failed to secure any investment and was at the same time running a consultancy. Braun said his financial commitment to the fund would end if Comisar did not secure at least $250 million from investors within the first year of operation.
“Mr. Comisar has had a 30 year career operating under a code of honesty, the highest ethical standards, and unyielding commitment and support for his clients that has never before been questioned,” Comisar’s lawyer, Joel Kozberg, said in an emailed statement in response to the petition. “We are confident that the evidence will show Mr. Braun did commit the actions and egregious breaches of contractual agreements alleged in the lawsuit. ”
Los Angeles attorney Larry Stein, who is representing Braun, said the integrity of his client was not for Kozberg to decide. “It is for others, the media and ultimately the courts,” Stein said. “I will not stoop in a public forum to say negative things about his client, I will allow the courts to make the decision.”
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