Inside an exploding audio divorce
Business bust-ups are sometimes worse than a divorce, especially when the parties go to court. CX fondly remembers the war between Gary Hackett and Terry Davenport of Staging Connections fame. It was a while back, and quite a stoush. At least it shaped up like that, judging by the 80 page affidavit that found its way into our office.
They got smart and settled before the laundry was hung out in court. That denied CX the delicious prospect of reporting the more juicy components of the affidavit. Bugger!
Hopefully the much smaller Master Sound Productions Pty Ltd case will also settle, with partners Bob Scirpo and Gabriel Zouain shaping up for a directions hearing in the Supreme Court of NSW this week.
Scirpo says, in effect, that Zouain squeezed him out of the company and that he should be paid out. Zouain says he made many offers to do so but they couldn’t reach an agreement.
A sensible mediator wouldn’t take long to put a value on a company like Mastersound. It provides touring audio with an aging inventory of Martin Wavefront and Digico. The written down value of the equipment would be ‘X’ and the goodwill would be ‘Y’. Goodwill is generally 4 to 8 times annual profit.
Factors like wages and drawings come into it.
On that, Scirpo has claimed a significant amount for back pay, saying that various verbal agreements with Zouain were not honoured. His whole claim could amount to most of a million dollars, and it is very unclear whether Zouain has the ability to meet any judgement, let alone defend the case.
Scirpo has raised the ten grand downpayment on the legal action and acknowledged to CX that he knows it will cost more to run the matter. He believes, because his lawyer told him, that he has ‘a good case’.
Like many people who are too close and have emotions with no objectivity, these guys may go the way of Trump and Fatty and fight down to the ashes.