SFX sued by alleged “frozen out” co-founders

SFX Entertainment, the world’s biggest EDM events company, is being sued by three men who claim they were “frozen out” of the company, despite being key to SFX Entertainment’s rise.

Paolo Moreno, Lawrence Vavra, and Gabriel Moreno filed the suit yesterday at the U.S District Court, Central District of California, claiming SFX CEO Robert Sillerman used their industry connections in order to build the company, while failing to grant them “any significant ownership interest in the venture”.

The complaint reads in part: “Had they known that Sillerman’s true intentions were to use plaintiffs’ strategy, information, connections and access for his own gain, without granting plaintiffs any significant ownership interest in the venture, plaintiffs would not have entered into any agreement with Sillerman, and would not have undertaken to execute on the strategy for the benefit of SFX.”

SFX have issued a one-line statement, simply stating: “We will have no comment, other than to say we will vigorously defend this baseless lawsuit.”

In October, SFX Entertainment publicly floated the company, selling 26 million shares for a gross of US$260m. Later that month, SFX acquired the Totem OneLove Group, promoters of Australian EDM festivals Stereosonic, Creamfields, Solar Music and Outrage, for a reported $75 million.