Oates tried to sell his half of the business. Hall can鈥檛 go for that.
| Nashville
After more than a half-century of making music together,聽Daryl Hall is suing John Oates聽and arguing in arbitration that he can鈥檛 sell his share of a Hall & Oates business partnership without Mr. Hall鈥檚 permission.
Public court filings have revealed just how wide the rift has grown between the duo famous for hits in the 1970s and 鈥�80s, including 鈥淢aneater,鈥� 鈥淩ich Girl,鈥� 鈥淜iss on My List,鈥� and 鈥淚 Can鈥檛 Go for That (No Can Do).鈥�
Mr. Hall has聽accused Mr. Oates of blindsiding and betraying him, saying their relationship and his trust in Mr. Oates have deteriorated. Mr. Oates has said he is 鈥渄eeply hurt鈥� that Mr. Hall is making 鈥渋nflammatory, outlandish, and inaccurate statements鈥� about him.
A Nashville judge recently聽paused the sale of Mr. Oates鈥� stake聽in Whole Oats Enterprises LLP to Primary Wave IP Investment Management LLC until an arbitrator weighs in, or until Feb. 17.
Here are some recent developments.
Why are Hall & Oates going to court?
The dispute went public on Nov. 16, when Mr. Hall filed a lawsuit in a Nashville chancery court asking a judge to stop the sale by Mr. Oates, so a separate, private arbitration could begin. Mr. Hall鈥檚 lawsuit contends that going to court was the only way to ensure the sale by Mr. Oates and others involved in his trust didn鈥檛 close before an arbitrator could weigh in. Mr. Hall filed for arbitration on Nov. 9.
Still, the pair鈥檚 private business holdings and their agreements are largely blocked from public view, even after a judge unsealed many filings. Mr. Oates鈥� attorneys have argued that he lived up to his contractual obligations and didn鈥檛 go behind Mr. Hall鈥檚 back. They have said the case should have remained only in arbitration, while accusing Mr. Hall of publicizing issues from what had been a private disagreement.
A judge put the sale on hold the day the lawsuit was filed, then extended that pause last week.
What is the proposed sale timeline?
A court declaration by Mr. Hall shows what kind of valuable Hall & Oates materials Whole Oats Enterprises contains, though it does not describe the value, ownership percentage breakdown, or sale price for those materials. The declaration cites materials such as trademarks, personal name and likeness rights, record royalty income, and website and social media assets.
The musicians had been considering how to undergo a 鈥済lobal divorce鈥� in late 2022, when Mr. Hall said he was entertaining Mr. Oates鈥� push to dissolve their touring entity and a separate partnership related to their musical compositions and publishing, Mr. Hall鈥檚 declaration says. Mr. Hall, meanwhile, proposed dissolving Whole Oats Enterprises.
Their disputes about Whole Oats Enterprises worsened and hit an impasse, leading them to enter mediation in July, Mr. Hall鈥檚 arbitration filing states.
The filing accuses Mr. Oates of quietly negotiating a deal with Primary Wave, while letting Mr. Hall continue with normal mediation tasks, costing him time and legal fees.
Mr. Oates鈥� team entered into a non-disclosure agreement on Oct. 2 without Mr. Hall鈥檚 knowledge that provided Primary Wave confidential information from the partnership. Blind to the Primary Wave negotiations, Mr. Hall and his representatives attended an hours-long mediation the next day. On Oct. 19, Mr. Hall鈥檚 attorneys provided Mr. Oates鈥� team with proposed settlement documents, though Mr. Oates鈥� team still has not commented on them, the arbitration document says.
The next day, Mr. Oates sent Mr. Hall the transfer notice and letter of intent describing the sale to Primary Wave, according to Mr. Hall鈥檚 filing.
What was Daryl Hall鈥檚 reaction?
The court fight was initially shrouded by corporate legalese and filings unavailable the public鈥檚 view. Mr. Hall then peeled away the veneer in a point-by-point declaration detailing why he is 鈥渄eeply troubled by the deterioration of my relationship with, and trust in, John Oates.鈥�
Mr. Hall鈥檚 account was filed in early November during arbitration and made public later in the month in the lawsuit. It alleges that Mr. Oates and his team engaged in the 鈥渦ltimate partnership betrayal鈥� by pushing to sell his share while telling Mr. Hall鈥檚 associates that he wanted to maintain his ownership.
Mr. Hall alleged that Mr. Oates in recent years has become 鈥渁dversarial and aggressive instead of professional and courteous鈥� toward him. Mr. Hall accused Mr. Oates of making business demands via a 鈥渞evolving cast of lawyers.鈥�
Mr. Hall said he was two days from leaving for a tour across the West Coast, Japan, and the Philippines, when Mr. Oates first provided notice of the impending sale on Oct. 20.
Mr. Hall said he would have never approved a sale to Primary Wave, and takes issue with its business model. Mr. Hall expressed concern about how his name and likeness and other assets could be used.
Additionally, he said Mr. Oates鈥� team has not provided him with the confidential information disclosed to Primary Wave, which has already owned 鈥渟ignificant interest鈥� in Hall & Oates鈥� song catalog for more than 15 years. The New York-based company has struck deals in recent years to buy stakes in the music catalogs of artists like聽Bing Crosby, Bob Marley, Stevie Nicks, Whitney Houston, and聽Prince.
Deena Merlen, a Connecticut-based partner at Reavis Page Jump LLP with entertainment law expertise, noted that Primary Wave has struck more than $2 billion in investment deals in about two years, as it buys music rights.
鈥淧rimary Wave has been a kid in a candy shop, with a pocket full of cash,鈥� said Ms. Merlen, who is not involved in the Hall & Oates case. 鈥淣ot a great stretch to see the temptation for Oates, under the circumstances.鈥�
What was John Oates鈥� reply?
In his own declaration, Mr. Oates expressed disappointment with his longtime partner鈥檚 words, saying Mr. Hall鈥檚 accusations that Mr. Oates went behind his back and breached their agreement aren鈥檛 true. Mr. Oates declined to go into specifics, saying he鈥檚 obligated to keep details private 鈥� even if Mr. Hall didn鈥檛.
Mr. Oates argued he had been trying for some time to enhance their business partnership, but Mr. Hall has become unwilling to work with him to protect what they created. He also said Mr. Hall has been trying for years to be seen as an individual.
According to Mr. Hall鈥檚 arbitration filing, Mr. Oates鈥� attorneys have argued the sale is allowed under a section of their business agreement that appears to give one partner a chance to buy the other鈥檚 share when faced with an outside sale.
Ms. Merlen cautioned that without seeing the full agreement 鈥� which is under court seal 鈥� she can鈥檛 be certain how the provision works. But she said it appears to be a 鈥渞ight of first refusal,鈥� giving non-selling members greater control over proposed transfers, 鈥減otentially blocking a sale to a third party they do not want to let in, while at the same time increasing their own ownership stake.鈥�
Mr. Hall鈥檚 team has argued other contractual violations void the deal.
鈥淎s to whether he [Oates] had the right to do what he allegedly did 鈥� or tried to do 鈥� with Primary Wave, well, that remains to be seen,鈥� Ms. Merlen said.
This story was reported by The Associated Press.
