The legal battle between dance music giant Insomniac Events and a trio of Miami club operators is heating up with a new countersuit that accuses Insomniac and its CEO Pasquale Rotella of “predatory tactics and greed.”
The dispute stems from a soured partnership between Insomniac, the global dance music events company partly owned by Live Nation, and Miami club and festival operators David Sinopoli, Davide L. Danese and Jose Gabriel Coloma Cano, who are best known for operating the city’s famed Club Space venue and their work on the city’s III Points festival.
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Insomniac brought a lawsuit last month against Sinopoli, Danese and Coloma Cano (referred to as “CDD” in legal papers), claiming the group tried to “bully” its way into more control over upstart Miami club Factory Town. But in counterclaims filed Wednesday (Sept. 24), CDD says it’s actually Insomniac and Rotella who brought down their partnership with bad faith business practices. The countersuit is seeking unspecified monetary damages.
“Insomniac and Rotella’s deceit in the Factory Town partnership and their failure to abide by the settlement agreement are unfortunately only the latest instances of Insomniac and Rotella’s unscrupulous business dealings and conduct,” reads the countersuit. “Rotella and Insomniac are well-known in the electronic music industry for their greed and mistreatment of business partners, colleagues and employees alike.”
The countersuit cites social media comments critiquing Insomniac, as well as a 2012 criminal indictment that charged Rotella with bribing an event manager at the Los Angeles Memorial Coliseum. The charges were later dismissed, with Rotella pleading no contest to a misdemeanor conflict of interest and getting probation.
“Rotella is not just a criminal and a fraud. He is also insufferable to work with,” write CDD’s lawyers. “The CDD parties have had the misfortune of witnessing and experiencing first-hand Rotella’s cruelty, self-centeredness and volatility towards his business partners and/or employees.”
Reached for comment on these new counterclaims on Wednesday, Insomniac’s attorney Jordan Shaw says he’s confident in their legal position and that CDD’s personal attacks are irrelevant.
“Their counterclaim is exactly what we expected, and the fact that they’re relying on social media posts and dropped charges from 20 years ago tells you everything you need to know about their current claims,” says Shaw.
Insomniac’s original lawsuit against CDD claims the promoters made “outrageous demands” last year for more money and control of Factory Town. But the countersuit tells a different story, saying Insomniac “methodically and unilaterally” stripped away CDD’s financial and ownership rights with the aim of leaving the promoters “trapped and forced to accept ever-worsening conditions.”
According to CDD, the original Factory Town agreement promised them a 49% stake in the venue. But the counterclaim says “Insomniac’s and Rotella’s actual intent was to gain full control of the Factory Town venue, obtain a lease for the Factory Town property under only Insomniac’s name, and then unilaterally rewrite the deal under which the CDD Parties had performed and under which the CDD Parties exceeded all expectations, leaving the CDD Parties with all the work, all the risk, and a drastically reduced upside.”
The two sides went into mediation this summer and emerged with a settlement, under which Insomniac would buy out CDD for $3 million and assume control of Factory Town. The Insomniac lawsuit alleges the CDD parties have since breached this settlement agreement by interfering in its planning of Factory Town’s Hocus Pocus Halloween party and programming for Art Basel Miami in December.
The countersuit, however, claims Insomniac was actually required to collaborate with CDD on both Hocus Pocus and Art Basel under the settlement. CDD says Insomniac has breached the deal by booking talent without their approval and ignoring myriad emails from CDD, copies of which are included in the suit.
In one example, CDD claims Insomniac made an offer to party brand CircoLoco “that represented a 44% increase from the prior year’s deal.” CDD objected to this offer, saying that it did “not reflect historical performance, venue capacity, or the reality of our shared structure.” The countersuit alleges that subsequent emails about the details of this deal were ignored by Insomniac.
CDD’s lead attorney, Bruce Weil, said in a statement on Wednesday that his clients have “established themselves as respected and valuable members of Miami’s community through years of supporting local artists and boosting the local economy.”
“It is disappointing that Pasquale Rotella and Insomniac are manipulating the facts by accusing CDD of the exact misconduct they themselves have inflicted, while retaliating against Club Space by attempting to obstruct and undermine CDD’s ability to operate and manage it during a period of unprecedented success,” Weil added.
Insomniac lawyer Shaw, meanwhile, maintains that the language of the settlement agreement and orders from the dispute’s mediator, retired judge Michael A. Hanzman, support Insomniac’s reading of the agreement.
“The facts are the facts,” said Shaw. “The Judge Hanzman order attached to the complaints says what it says, and the defendants cannot escape those realities no matter how many Twitter posts they quote in their counterclaim.”
