Avalanche City vs Matt Coleman

The Spinoff have published a fascinating story on musician Dave Baxter (Avalanche City) getting ripped off by his manager, Matt Coleman, including claiming Recorded Music NZ royalties that were intended for the artist and then not telling the artist.

Read "Exclusive: Avalanche City’s former manager ripped him off for over $300,000, according to High Court judgment"

snip: "About a month ago, Matthew Coleman, one of New Zealand’s leading music managers (and 2010 New Zealand Music Manager of the Year), was ordered to pay $307,287.27 to Dave Baxter, a musician better known as the one-man band Avalanche City.

How did Coleman not pay Baxter what he was due? Let High Court judge Justice Susan Thomas count the ways. She found Coleman had withheld more than $240,000 owed to Baxter through various means including:

– Under-reporting Avalanche City’s income, and keeping more than the 20% share he was owed as the band’s manager.

– Under-stating funding given to the band

– Charging for disputed expenses

– Overstating his commissions on merchandise sales

But none of those actions were as on-the-nose as this one…
Coleman siphoned nearly $85,000 of Baxter’s royalties into his family bank accounts

Some of Coleman’s actions could be explained by incompetence. In her judgment, Justice Thomas was careful to point out that one incident couldn’t be interpreted so charitably.

The judgment states that Coleman signed Let The People Speak – which represented several artists including Dane Rumble, Ezra Vine and Jupiter Project – up to receive Recorded Music NZ royalties earned by Avalanche City without Baxter’s knowledge. All the royalties collected on the band’s behalf were then paid directly into a joint bank account Coleman held with his wife, or, in one case, his wife’s personal account. Coleman never reported the income to Baxter, the judgment shows.

Coleman argued he was entitled to collect the royalties as the band’s label. Justice Thomas ruled several things:

1. He wasn’t the band’s label
2. Even if he was, he’d only be entitled to 50% of the royalties he took
3. He should’ve reported the income to Baxter no matter his role
4. Under no circumstances should income have been paid into Coleman’s personal account

She decided Baxter was owed nearly $85,000 and issued this precisely worded legal burn:

“A generous interpretation of Mr Coleman’s dealings with Mr Baxter would conclude that he had not deliberately siphoned off money due to Mr Baxter but rather displayed an inexcusably lax attitude towards accounting practices…

“The Recorded Music situation however falls into a different category. It is difficult to accept any innocent explanation of the non-disclosure of those sums.”

Elsewhere she wrote:

“The payment of the money into various personal bank accounts of Mr and Mrs Coleman emphasises the concerns. Those circumstances are more suggestive of active dishonesty.”

The kicker is Coleman put his company into liquidation shortly after the decision came out, with the liquidators saying “The director identified that the company was unable to pay its debts as they were due”. One of the creditors listed is Dave Baxter.

Baxter told Stuff.co.nz that "I know I'm not the only musician that has been taken advantage of by Coleman."

"Of all the artists he's taken advantage of, I was the only one really in a position to do this. It was a big part of my decision to take this to court and part way through the process we became aware we were unlikely to see any money but we felt like we needed to keep going to make sure he couldn't keep doing this to other artists."

ADDED Statement from MMF: "Matt Coleman is a former member of the Music Managers Forum (NZ), and we are shocked and disappointed to have learnt the details of the recent court case. The best music managers in the New Zealand music industry place an extremely high value on ethical conduct across all aspects of the role they undertake for their artists. The music industry cannot grow without its leaders conducting themselves with integrity and honesty.

The Music Managers Forum has a code of conduct that all members must adhere to in order to retain their membership. This ensures that not only the individual artists under the manager's care benefit, but ultimately the New Zealand music industry as a whole.

In light of the verdict and our members feedback the MMF (NZ) Executive Committee have met and decided to revoke Matt's 'Manager of the Year' and 'Regional Manager of the Year' awards given in 2010."

Statement from Independent Music NZ, the indie labels association: " ... As an organisation, IMNZ condemns the breach of trust illustrated by the court ruling and the disregard shown for the rights of the artist. It’s simply not how a New Zealand music business should operate. We are pleased that Dave has had his day in court, but saddened that this situation occurred in the first place..."