A Missouri data discovery firm hired to help LiveXLive prepare its defense against a $26 million lawsuit is asking a California judge to seize more than $650,000 in unpaid legal fees from chief executive Robert Ellin’s streaming app company.
The extraordinary request foreshadows a litigious year ahead for LiveXLive as it defends itself against six open lawsuits and four separate legal efforts to enforce judgements against the publicly traded media company. Many of the cases — including a lawsuit filed by BMI over unpaid licensing fees owed by LiveXLive subsidiary Slacker Inc, a fraud lawsuit by a former friend and colleague and a patent dispute with Rothschild Broadcast Distribution Systems — had stalled in the court system last year due to COVID-19. That includes a $26 million lawsuit filed by Joe Schnaier in 2018 over the sale of Wantickets to LiveXLive — Schnaier says Ellin misrepresented the value of the company to close the deal, while Ellin countersued claiming that Schnaier hid liabilities when selling the company.
LiveXLive’s attorneys hired XACT Data Services to assist with the legal effort, but the company said it never got paid for its work. On March 15, lawyers for XACT Data Services filed an application for a writ of attachment, legal parlance for a court order directing law enforcement to seize assets as a civil dispute winds its way through the court system. XACT Lawyer John Ly says the bill represents a four-month “massive review of documents,” for LiveXLive “involving 31 contract lawyers and “hundreds of thousands of pages of documents.” Ly is asking the court to seize $536,451 from LiveXLive, along with $63,639 in interest and $37,551 in penalties.
XACT was hired at the behest of Latham Watkins, a well-known international law firm that agreed to defend LiveXLive in the breach of contract and fraud suit bought by Schnaeir. Latham Watkins experienced a similar billing dispute with LiveXLive around the same time as XACT and later petitioned a the New York judge in the case to allow it to withdraw from its defense of LiveXLive months after agreeing to take the case.
“Since Latham began representation in this matter, Defendants have also failed to pay a single invoice from Latham or any of the vendors providing support to Latham in this litigation,” attorney Christopher Clark wrote to judge overseeing the Schaeir lawsuit in a October 28 filing. Clark said his team had completed all document production in the case, minus “review of Mr. Ellin’s text messages.”
LiveXLive’s attorneys prior to Latham Watkins also quit mid-case over non-payment issues. The company is currently being represented by attorney Jeffrey Katz. On March 10, Schnaier’s attorney filed an affirmation that Schnaier’s legal team was ready to schedule a jury trial in the lawsuit.
Billboard reached to a rep for LiveXLive for this story, and was told the company had no comment. On Jan. 19, lawyers for LiveXLive filed their first response to the XACT lawsuit, denying “each and every allegation” brought in the civil case.
“This answering Defendant acted in good faith, without malice, and in a manner which was not outrageous, so as to protect and assert legal and economic rights which it believed existed,” attorney Katz wrote, later noting “that [LiveXLive’s] conduct was justified under the circumstances in that [XACT] was in breach of the contract.”
A hearing for XACT’s writ of attachment application is scheduled for April 6 at 1:30 pm at the Stanley Mosk courthouse in Los Angeles.
