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A company that anonymously bid $15 million last month for the rights to rock legend Jimi Hendrix’s songs could end up in a “purple haze” of regret as a result of litigation surrounding the sale. On Nov. 6, Southern District Judge Lewis A. Kaplan granted the Hendrix estate’s request for a preliminary injunction and attachment in its attempt to block the sale pending final resolution of issues. Judge Kaplan said in Experience Hendrix v. Chalpin , 06 Civ. 9926 that the threat of irreparable injury to Mr. Hendrix’s estate was “palpable.” Moreover, he found the estate was likely to prevail on the merits of its claim that it owns the songs. (The decision was published Nov. 16). Judge Kaplan also issued an order of attachment last week requiring defendants Edward Chalpin, PPX Enterprises and PPX International to pay the Hendrix estate $941,711 the estate says it is owed, plus any interest accrued. And Experience Hendrix, a Seattle-based company run by Mr. Hendrix’s relatives, asked the judge to impose sanctions on its adversaries , claiming that they violated a temporary restraining order issued by the judge before the Oct. 26 auction. A spokesman for Experience Hendrix said last week that the family would go to court again if the putatively successful bidder tries to exercise its rights. “[The bidder] paid $15 million to be on the receiving end of a lawsuit,” Bob Merlis, a spokesman for Experience Hendrix, said. “If he tries to assert his rights, he will be challenged.” Steve Z. Szczepanski, an intellectual property partner at Foley & Lardner, said that if the bidder asserts his ownership of the songs, the parties will have to go back through all of the contracts that Mr. Hendrix made during his career. “The buyer obviously knows this, and thinks [it] has a chance of being successful after doing this,” said Mr. Szczepanski, who is not involved in the suit. Mr. Szczepanski estimated that Mr. Hendrix’s recordings generated about $8 million in income a year. “There is a lot of money involved,” he said. “Assuming both [the bidder and the estate] have a legitimate position, maybe they will come up with some settlement, and will split the baby.” The dispute dates back to 1965. The then-unknown electric guitarist, whose music ushered in a new era in blues rock, signed a one-page recording agreement with PPX Enterprises, an entity controlled by Edward Chalpin and based in New York. According to Judge Kaplan’s decision, Mr. Hendrix agreed to “produce and play and/or sing exclusively for Enterprises” for a three-year period. He gave Enterprise exclusive rights to the masters produced, in exchange for a royalty of 1 percent of the retail selling price of the records so produced. Mr. Hendrix shot to international fame two years later. In June 1967, he performed at the Monterey International Pop Festival and wowed the audience with his rendition of “Wild Thing.” His whirlwind success was short lived: He died of a drug overdose in 1970 at the age of 27. ‘A World of Controversy’ Judge Kaplan noted that after Mr. Hendrix’s untimely death the musician “left a body of musical works and world of controversy.” Mr. Hendrix’s estate and Mr. Chalpin and PPX Enterprises, an entity based in New York, have been engaged in a series of lengthy legal battles in Great Britain and the United States over the rights to Mr. Hendrix’s song. Three years ago, New York Supreme Court awarded Experience Hendrix a $725,868 judgment against Mr. Chalpin and Enterprises. Experience Hendrix has been unsuccessful in collecting this judgment, which now exceeds $919,000. In late September of this year, the estate learned that PPX International (a sister company of PPX Enterprises) planned to sell the rights to 33 Jimi Hendrix songs and the rights to an unreleased album called “Public Enemy.” It also discovered that the estate of Michael Frank Jeffrey, Hendrix’s British manager and the purported owner of the “entire Jimi Hendrix Catalog” also planned to participate in the auction. As Judge Kaplan noted, Mr. Chalpin is the administrator of Mr. Jeffrey’s estate and has a “significant financial interest” in the transaction. On Oct. 18, 2006, Experience Hendrix filed suit against Mr. Chalpin and PPX International and PPX Enterprises in the Southern District, arguing that Mr. Chalpin was manipulating the transaction in order to get out of paying Experience Hendrix the $919,000 judgment. The rights to the songs were sold, but there were no bidders for the rights to “Public Enemy” or to the 33 Jimi Hendrix masters, which were also offered at the auction. Nevertheless, Experience Hendrix has argued that Mr. Chalpin and Enterprises fraudulently conveyed the 33 Hendrix masters to PPX International, without consideration. It also claimed that Mr. Chalpin is engaged in self-dealing with respect to the sale of Mr. Jeffrey’s estate. “The crux of [Experience Hendrix's] complaint is that Chalpin, who is a judgment debtor of the plaintiff, caused the fraudulent transfer of valuable assets by Enterprises, also a judgment debtor, to another Chalpin-controlled entity, International, for the purpose and with the effect of hindering plaintiff’s ability to collect its judgment,” Judge Kaplan wrote in his Nov. 6 decision. Frustrated Collection Efforts The judge held that Experience Hendrix’s efforts to collect from Mr. Chalpin and Enterprises “have been frustrated at every turn.” He also said that the timing and circumstances of the alleged transfer remain unexplained by documentary evidence or credible testimony. Judge Kaplan was especially critical of Mr. Chalpin, calling his behavior “icing on the cake.” “The defendants failed to produce patently relevant documents in response to plaintiff’s request,” Judge Kaplan wrote. “The excuse advanced was frivolous and not seriously held. The object was to avoid putting evidence into the hands of the plaintiff for the hearing in an effort to defeat plaintiff’s motion.” The judge said there was substantial reason to believe that, unless enjoined, Mr. Chalpin and the defendant companies would “continue to attempt to frustrate plaintiff’s efforts to collect the judgment.” Orin Snyder, an intellectual property specialist and partner at Gibson, Dunn & Crutcher who was not involved in the case, said Judge Kaplan’s decision was a blow to the defendants. “This judgment and attachment handcuffs [Mr. Chalpin's] ability to receive any assets until he makes the payment,” said Mr. Snyder, who has represented Warner Music Group in an unrelated matter involving Mr. Chalpin and Enterprises. Ocean Tomo Auctions, a division of Chicago-based intellectual capital merchant bank Ocean Tomo, conducted the auction. Wendy Chou, a spokeswoman for Ocean Tomo, declined to identify the buyers. However, an e-mail exchange introduced in connection with an affidavit by Ocean Tomo’s general counsel suggests the anonymous purchaser was a company called the Music Publishing Company of America. A person who answered the phone at the company’s New York office declined to comment. Monica Petraglia McCabe, a partner at DLA Piper, represented Ocean Tomo and Ocean Tomo Auctions. Ms. McCabe also declined to comment. Peter S. Shukat and Dorothy M. Weber, partners at Shukat Arrow Hafer Weber & Herbsman, represented Experience Hendrix. Mr. Shukat and Ms. Weber declined to comment. Lowell B. Davis, a Long Island-based solo practitioner who specializes in trademark law, represented the defendants in the auction dispute. He declined to comment. - Beth Bar can be reached at [email protected] .

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