Friday, December 02, 2005

KD Lang Sues Business Manager for Theft

(Link) With access to the Canadian songbird's checkbook, kd's manager indulged her constant craving for cash to tune of several thousand bucks. For "fees" and "expenses", of course.
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LNewsEditor said...

JIC Post:
By Lyle Jenish
Business Examiner

Allegations leveled by k.d. lang against Victoria's Annabel Lapp, owner of Annabel Lapp Group Inc., are a ploy by lang's new U.S.-based business managers to poison a 16-year professional relationship, says Lapp's Victoria lawyer Michael Velletta. Lang's new managers are looking to "dazzle and impress" her by bringing forward these "baseless allegations" he added.
In a 16-page action filed on behalf of lang by lawyer Charles Harder of Los Angeles law firm Lavely & Singer, the Alberta-born singer alleges that Lapp committed "numerous acts of fraud, breaches of fiduciary duty, professional negligence and other wrongful conduct." Lang maintains that this allowed Lapp to pay "herself hundreds of thousands, if not millions, of dollars in excessive fees from Plaintiffs' financial accounts," without her knowledge or consent.
None of the allegations contained in the action filed at the superior court for the county of Los Angeles - west district has been proven in court. Velletta said he is expecting to file a response to the lang action within two weeks.
"These are completely unsubstantiated, unsupported allegations that have never been brought to our attention prior to this," Velletta added.
Contacted by the Business Examiner on November 10, Annabel Lapp faxed a prepared statement, in which she described herself as "surprised" by lang's allegations.
"I am very distressed and saddened by the comments and allegations that have been made as our company has always held k.d. lang in very high regard. We devoted 16 years to serving k.d. lang culminating in a number of Grammy and Juno awards and a Canadian National Arts Centre award prior to her recently moving her business to the United States and new U.S. business management. Although we enjoyed working with k.d. lang, these allegations are totally baseless and without foundation and we are completely confident that they will be defeated."
In 1990, lang hired Lapp to serve as her personal business manager and to oversee her various U.S.-based companies, including Whatever You Want LLC, O.K.D. Touring Inc., KD.US.Tour Inc. and D.Tour, Inc. The business relationship involved Lapp managing lang's finances, paying bills, budgeting expenditures, book and record keeping, preparing financial statements, tax planning and preparing lang's California and U.S. tax returns.
However, lang alleges the business relationship went sideways when Lapp and Lapp Group Inc. began writing cheques to themselves on lang's personal and corporate accounts without lang's consent. While lang alleges "hundreds of thousands, if not millions, of dollars" in unauthorized transactions, the singer is unsure of the actual amount. Lang alleges that "Lapp intentionally concealed" fee transactions, making it difficult or impossible to discover unauthorized transactions, or determine the amount of fees "paid by Lapp to Lapp from Plaintiffs' accounts."
Lang alleges in the weeks leading up to the filing of the lawsuit, she demanded that Lapp provide financial and business records. However, lang alleges Lapp provided only certain records, and only for the years 2004 and 2005. Lang alleges that financial and business records from 1990 through Dec. 31, 2003 remain outstanding.
Lang alleges that, after she "learned of the wrongful conduct by Lapp," she gave Lapp notice of termination on or about September 2. Lang alleges that several days later Lapp demanded a payment of "over $50,000" to cover outstanding fees as well as an additional retainer of $75,000 to assist in the "transition" of lang's business and files to a new business manager.
Lang's Los Angeles lawyer Charles Harder told the Business Examiner the demand for $75,000 in transition expenses was not itemized as to what the money was to cover. He does not know if the demand for $50,000 was itemized.
Initially, Lang refused to pay either of Lapp's fee requests, and instead demanded that Lapp simply "box and ship" the files to her new financial representative, the Haber Corp., in Los Angeles. Lang says that in early September she eventually agreed to pay Lapp $10,000 for shipping costs but all she received were records for 2004 and 2005. According to lang, Lapp later insisted that she pay invoices in excess of $50,000, plus expenses of approximately $5,000 for storage costs, to receive the 1990-2003 financial records.
Velletta says the financial documents remain in storage, "awaiting k.d. lang's paying of the [storage] bill."
Lang says her action is currently relegated to 2004-2005 because she was not able to review the other 15-years worth of financial records that were held by Lapp.
According to lang lawyer Harder, at time of publication, the 1990 through Dec. 31, 2003 documents had not been delivered to Haber Corp.
Lang also alleges that during the week of September 6 - and "after Lapp's termination" - Lapp and Lapp Group wrote five cheques totaling $22,000 ($4,500, $4,500, $4,500, $4,500 and $4,000) to themselves from lang bank accounts. Lang alleges the funds were drawn without her knowledge or consent.
"Annabel had signing authority over those accounts," said Lapp's lawyer Velletta. "She [Lapp] used her signing authority appropriately."
Over seven causes of action, lang accuses Lapp, Lapp Group and Lapp Group employee Dina Correale of breach of fiduciary duty, constructive fraud, concealment of fees, conversion of property, professional negligence and breach of contract.
Lang is asking the court to force Lapp to provide a full and accurate accounting from 1990 to 2005. Lang is also seeking compensatory damages, punitive or exemplary damages, costs and interest at the "maximum legal rate."
Lapp operates Lapp Group out of offices in Los Angeles, Vancouver and Victoria. She also serves as treasurer on the board of governance finance committee at Saint Michaels University School. Lapp is the ex-wife of multi-discipline musician Daniel Lapp.
Other artists currently or previously in the Lapp Group stable include country singer Alicia Tai and pop duo Tegan and Sara. On tour in the U.K. at time of writing, Tegan and Sara are now represented by Nick Blasko and Piers Henwood of Victoria-based atomique music co.
"I'm aware of the allegations and suit against Annabel," wrote Blasko. "That said, I'd rather not comment on the situation or involve Tegan and Sara in any such article. However, I will say that all of our past dealings [with Lapp] have been professional and positive."
Velletta says Lapp's other clients are pleased with the professional services the Lapp Group provides and "very supportive of her [Lapp]."

12/02/2005 10:03 AM

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