Guitar Center gets sued for 1 billion dollars :) - Jemsite
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post #1 of 12 (permalink) Old 05-30-2007, 04:54 PM Thread Starter
 
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Guitar Center gets sued for 1 billion dollars :)

Guitar Center's latest Annual Report (10K) contains the following statement:

LEGAL PROCEEDINGS

On November 29, 2005, a case was filed against us and other defendants, including our Chief Executive Officer, in the United States District Court for the Southern District of Florida. The complaint asserts, among other things, violations of the Federal Racketeering Influenced and Corrupt Organization Act (RICO) and a corresponding Florida statute, Sections 1 and 2 of the Sherman Antitrust Act, Section 2 of the Clayton Act (as amended by the Robinson-Patman Act), the Antidumping Act of 1916, the Florida Antitrust Act of 1980, and the Florida Deceptive and Unfair Trade Practices Act, as well as tortious interference with business relationship under Florida law and civil conspiracy under Florida law by some or all of the identified defendants in connection with the claimed inability of Ace Pro Sound and Recording, L.L.C. to obtain vendor lines for its store. The complaint purports to be made as a class action on behalf of all current and former retail sellers of musical instruments and/or sound equipment and/or recording equipment with stores located in geographical regions in the United States wherein some or all of the defendants have carried on business, and seeks compensatory damages, treble damages, punitive damages, injunctive relief and attorneys fees. Service relating to the complaint was made on us on January 12, 2006 and a responsive pleading is due in March 2006.

While we believe this lawsuit is without merit and intend to defend it vigorously, it may, regardless of the outcome, result in substantial expenses and damages to us and may significantly divert the attention of our management. There can be no assurance that we will be able to achieve a favorable settlement of this lawsuit or obtain a favorable resolution of this lawsuit if it is not settled. An unfavorable resolution of this lawsuit could have a material adverse effect on our business, financial condition and results of operations. Regardless of the outcome, the costs and expenses incurred by us to defend this lawsuit could adversely impact our financial condition.

==========================

The Music Trades, April 2006 edition also carries an article titled:

Fred Rubin Files $1.0 Billion Suit Against Guitar Center & Seven Suppliers

"Class action alleges that GC prevented Korg USA, JBL, Mackie, St. Louis Music, TASCAM, Telex, and Yamaha from selling to his Ace Pro Sound & Recording"

As it says, those companies above are also defendants in this suit.
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post #2 of 12 (permalink) Old 05-30-2007, 05:04 PM
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Re: Guitar Center gets sued for 1 billion dollars :)

I believe Ibanez has been subpoenaed as witnesses.

It's all about price fixing. The suit was filed on behalf of a consortium of East Coast dealers that have banded together, the way I heard it anyway.
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post #3 of 12 (permalink) Old 05-30-2007, 05:13 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

This actually doesnt surprise me.

GC has a lot of weight they can throw around to manufacturers, by stating if you sell to anyone else in a certain area then we will not carry your products nationwide.
Now if there are exclusivity contracts in place then thats different.


I wonder if this is why ESP cannot be found in Guitar Centers?
Guitar Center could sell the crap out of LTD's, with all the kids that go in there, but they dont carry them.

Cool story Rich, Thanks.
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post #4 of 12 (permalink) Old 05-30-2007, 05:26 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

I didnt know this:

"We are also the largest direct response retailer of musical instruments in the United States through our wholly owned subsidiary, Musician's Friend, Inc., and its catalogs and websites, including .Musicians Friend. guitarcenter.com .wwbw.comwww .musik123.com and related websites."

Business must be good at Guitar Center:

Entry into a Material Definitive Agreement
On February 21, 2007, the Compensation Committee approved an increase in the base salary of Marty Albertson, our Chief Executive Officer, from $735,000 per annum to $771,750 per annum, effective from January 1, 2007.

Bonuses. On February 21, 2007, the Compensation Committee approved bonus compensation for executive officers as follows: Marty Albertson ($220,500).

Last edited by michblanch; 05-30-2007 at 06:16 PM.
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post #5 of 12 (permalink) Old 05-30-2007, 05:32 PM
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Re: Guitar Center gets sued for 1 billion dollars :)

This is the best news I heard all day.
I knew GC owned mf.com, but I didnt know they also owned *******.com, ********.com, ********.com or analgoat.org

(I had to type something that didnt get blocked)
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post #6 of 12 (permalink) Old 05-30-2007, 05:45 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

analgoat.org lol - I almost pasted it into my browser !!!
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post #7 of 12 (permalink) Old 05-30-2007, 06:20 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

Quote:
Originally Posted by markg5150 View Post
analgoat.org lol - I almost pasted it into my browser !!!
Don't bother: It's just a goat double-checking his shopping list, correcting someone about something to do with Star Wars, and picking lint off his jacket for an hour.
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post #8 of 12 (permalink) Old 05-30-2007, 07:51 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

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post #9 of 12 (permalink) Old 05-30-2007, 08:12 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

Quote:
Originally Posted by Petie View Post
Don't bother: It's just a goat double-checking his shopping list, correcting someone about something to do with Star Wars, and picking lint off his jacket for an hour.

And looks like he is a private detective that helps cops solve crimes also.
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post #10 of 12 (permalink) Old 05-30-2007, 08:47 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

Ay, why does it ALWAYS have to be Florida??!!
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post #11 of 12 (permalink) Old 05-30-2007, 11:02 PM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

Do they own http://goatse.cx as well? That was one fine site. It used to show an exhibit of injuries that GC inflicted upon the plaintiff by price fixing.
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post #12 of 12 (permalink) Old 06-01-2007, 11:44 AM
 
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Re: Guitar Center gets sued for 1 billion dollars :)

I thought I would see Gibson on the list of defendants.

There was a deal for awhile, maybe still in effect that GC was the only company permitted to use images of Gibson products in catalogs or advertisements.

There was also an issue with GC being involved with Gibson refusing to sell to Sam Ash & establishing minimum selling prices.
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