Scooter Braun, the music manager who discovered Justin Bieber and made enemies of Taylor Swift, is entangled in a court struggle with a former business partner over a failed $750-million fund.
Braun, his company, Ithaca Holdings, and another industry partner David Bolno were sued for fraud as well as breach of contract by Peter Comisar , who is a Goldman Sachs partner and the former Guggenheim Securities vice-chairman. According to a charge filed in Los Angeles County Superior Court on Tuesday, the suit demands more than $50 million in damages. According to the lawsuit, the issue arises from a disagreement over Scope Capital Management, a now-defunct Los Angeles investment firm that the two planned to co-own to capitalize on “the confluence of media, commerce, and consumer brands and celebrity association.” Braun allegedly enticed Comisar away from his job at Guggenheim Securities in February 2017 with promises of deep-pocketed contacts with moguls like David Geffen. The latter would participate in the fund, according to Comisar, a veteran banker. According to the complaint, Braun regarded Geffen as his godfather and claimed that the famed music producer was interested in investing $100 million with him.
Tensions arose over a year after Comisar joined the organization. Braun allegedly ceased paying his salary and broke financial promises, including supporting up to $7 million in fund expenses every year, according to Comisar. Comisar claimed that he had brought a team of experts from Guggenheim Securities with him and that Braun would not give them bonuses.
Braun’s attempts to recruit investors like Jimmy Iovine and Haim Saban were unsuccessful, according to the suit. Braun is also accused of concealing funds from the Carlyle Group to invest in Ithaca Holdings. This corporation would compete with Scope Capital on investments in the entertainment business, according to the lawsuit. Braun sold Ithaca Holdings to HYBE Co. of South Korea, which handles the K-pop group BTS, for $1.05 billion.
Commissar’s claim is “unlawful, exorbitant, and opportunistic,” according to Braun, who is attempting to settle the matter through arbitration.
Braun claimed to have put $5 million into the business, including funding Commissar’s $3 million yearly salaries, which he claims he has now lost.
Braun said in his appeal that Comisar had failed to get any investment while also offering a consultancy. Braun stated that if Comisar did not raise at least $250 million from investors in the first year of operation, his financial commitment to the fund would be terminated.
In response to the petition, Peter Comisar’s lawyer, that is Joel Kozberg, said, “Mr. Comisar has had a 30-year career operating under a code of honesty, the highest ethical standards, and uncompromising dedication and support. “We are convinced that the evidence will reveal Mr. Braun did commit the activities and gross contractual breaches stated in the lawsuit.”
Braun’s lawyer, Larry Stein of Los Angeles, said it was not up to Kozberg to decide on his client’s integrity. “It’s up to others, the media, and the courts,” Stein remarked. “I will not descend to say nasty things about his client in a public place; I will leave the judgment to the courts.”