ENTERTAINMENT

Parviz Omidvar plays financier to songwriters, doling out loans repaid with the artists’ royalties, but his terms leave some clients singing an unhappy tune

By Robin Respaut and Atossa Abrahamian REUTERS ILLUSTRATION

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LOS ANGELES, DECEMBER 6, 2012 which competes Omidvar, says it charges ter rivalry with the financier who introduced 13.88 percent interest a year and requires the “Bowie Bond,” the 1997 deal in which rom an office on Sunset Boulevard, that artists fit a strict set of criteria to qual- rocker David Bowie raised $55 million by a dapper 69-year-old has emerged as ify for a loan. The Houston company has selling debt backed by his future royalties. Fa go-to guy for musicians and song- about 50 clients, each making $100,000 or Omidvar and that financier, David Pull- writers looking for quick cash. more a year in royalties. man, have filed at least 11 lawsuits and His name is Parviz Omidvar, and over Omidvar says he currently has no out- countersuits against one another involving the past two decades, he has been lending standing loans at such high interest rates a handful of songwriter clients. Omidvar to artists and securing those debts with and that these practices are not representa- says Pullman is “obsessed with destroying royalty payments his clients earn from their tive of his business. He says rates on many our business” and that before Pullman came work. Michael Jackson was a customer, as loans were later reduced retroactively once along, there were “virtually no problems with is the son of late legend Marvin he determined that the clients were capable clients.” Pullman says Omidvar and his sons, Gaye. Omidvar’s website carries an old tes- of repaying him in full. Oliver and O’Neil, who have helped their timonial from Rock and Roll Hall of Fame Complicating Omidvar’s business is a bit- father in his business, “blame everyone but member Bobby Womack: “Thank you so themselves for their illegal activities.” much for always being there for me.” Bobby Womack’s lawyer says the The music bankers are battling over a Today, Womack is suing Omidvar for musician (below) was misled into famously risky clientele: songwriters, of- fraud. He alleges the financier tricked him signing a deal when he was ten elderly and desperate for money. Times into selling for $40,000 full control of a roy- incapacitated have always been hard for musicians, and alty stream that annually pays many times by painkillers industry lore is studded with examples of that amount on Womack-penned hits, in- naive talents gouged by agents and record- cluding blaxploitation classic “Across 110th company operatives. Street” and “It’s All Over Now,” the first U.S. The Internet has added to the struggle No. 1 record for the Rolling Stones. Wom- as pirated downloads have eaten deep into ack’s lawyer says the 68-year-old musician sales of recorded music. Making matters was misled into signing the deal in April last worse, a long-term credit drought is year, when he was incapacitated by painkill- plaguing songwriters, musicians, ar- ers following prostate cancer surgery. rangers and producers. Omidvar calls Womack’s claim “a simple Decades ago, music publishers and case of buyer’s remorse.” Womack understood songwriter societies like ASCAP and he was selling his royalties, and his allegations BMI would advance money to artists are “a complete lie,” Omidvar says. against future earnings. By the late 1980s, they and the handful of banks in the busi- STEEP PRICE ness largely abandoned the practice as too Omidvar’s quick cash can come at risky. An artist’s royalty income can fluctu- a steep price. Reuters found scores ate greatly, depending on record sales, radio of loans with interest rates ranging airplay and licensing agreements. from 1.5 to 2.5 percent every 10 to 15 “It’s extremely difficult [for recording art- days - annualized rates potentially rang- ists] to get a conventional loan, because they ing from 43 percent to 81 percent. Many have a very unconventional working history,” loans included fees of up to 20 percent of says Bob Clarida, a copyright attorney. the principal, which could accrue interest Omidvar fills this void. The idea is sim- at the same rate as the loan. In one lawsuit ple: Advance money to artists, who sign over brought by an Omidvar client, a California their royalty streams to his company. Omid- court found that one of the financier’s com- J ose fczyk aron var then collects the royalties directly from panies had charged illegally high rates on record labels and music societies until the loans smaller than $5,000. debt is repaid with interest. On his website, By comparison, Artist Royalty Tracking, REUTERS/A he offers “immediate cash to music royalty

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earners so they don’t have to wait months hospitalized for complications to receive their much-needed distributions.” from prostate surgery and placed Omidvar says he started out at an ac- on a morphine drip for two weeks, counts-receivable factoring company and fell his suit says. into the music business by chance. Clients It also says that the day after leav- say he wears formal suits and ties, setting him ing the hospital, Womack visited apart in casual Southern California. Omidvar’s office. Thinking he was “When you walk in, you feel like this guy simply borrowing money, the suit knows what he’s doing,” says Danny Pear- says, he signed away all his royalties son, a former client whose credits include for $225,000 to an Omidvar company the 1978 hit “What’s Your Sign Girl?” called Music Royalty Consulting Inc. Omidvar writes his loans as commercial After “costs and charges” were notes; interest rates on such notes, unlike deducted from the $225,000 loan those on short-term consumer loans, gen- Womack expected, the suit alleges, erally are exempt from regulatory rate lim- he received a check for $40,000 for “all its. While many of the notes carry maturi- past, present and future income” - a frac- ties of six months to a year, he says, most tion of what his royalties regularly bring are written with the expectation they will in annually, his lawyer says. Womack’s suit be paid off within weeks. “We don’t want claims he was confused because of medi- people to default in 30 days,” he says. “If we cation he was taking, and never would did that, we would be loan sharks.” have signed had he been of sound mind. III, the son and heir of the Omidvar, in an interview, says Wom- late soul singer, says that for 17 years, he ack “was in completely great shape” and has been a satisfied customer of Omidvar, understood he was selling his royalties. whom he calls “a really great guy.” “If you He notes that during the months pre- understand the contract,” he says, “there’s ceding and after the deal, Womack was no surprises.” performing in concerts, “dancing his heart out.” YouTube videos of live per- A HOST OF MALADIES formances in March and June of 2011 Bobby Womack’s family has a different show an animated and seemingly un- take. Womack started out in the 1960s as impaired Womack on stage. lead singer for doo-wop group the Valen- “Dementia and dancing are two dif- tinos. He went on to play guitar for soul ferent things,” says Jim star Sam Cooke and released hit singles like “Woman’s Gotta Have It,” “Har- ry Hippie” and “Across 110th GOLDEN OLDIES: Len Street.” Barry, Gene Page (and In the 1980s, Womack began his heirs) and Danny borrowing from Omidvar. His Pearson have all borrowed lawsuit says he took roughly 15 from Omidvar, pledging advances from Omidvar over the royalties from their past 25 years. long-ago hits. REUTERS/ By 2011, Womack was suffer- BRENDAN MCDERMID ing from prostate cancer, demen- tia, cataracts and other maladies, according to documents filed in the suit in Los Angeles Superior Court. In April that year, he was

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Ryan, Womack’s lawyer. Ryan declined to Omidvar “told me that my dad make Womack available for an interview. told him to look after us. … The case is scheduled to go to trial in May I trusted him.” next year. California exempts most commercial Chris Page loans from usury caps. Even so, a jury in son of late musician Gene Page 2009 found that Omidvar had overcharged on loans of less than $5,000, which are sub- they misappropriated his trade secrets by ject to limits. issuing Bowie-like royalty bonds. That suit That case involved Daryl Cleveland, son was ultimately dismissed. He also filed of Motown songwriter Al Cleveland, who complaints about elderly neighbors in co-wrote Marvin Gaye’s mega-hit “What’s his New York City co-op, accusing them Going On” and Smokey Robinson’s classic of running an illegal bookbinding busi- “.” ness out of their apartment. Pullman Al Cleveland was a client of Omidvar’s. and the co-op entered litigation, and When Al died in 1996, Daryl, now 56, the board kicked Pullman out, setting kept up the borrowing, using his father’s a legal precedent allowing New York $100,000 annual royalty stream as collat- City co-ops to oust undesired residents. eral. In court documents, Cleveland said Pullman moved to Los Angeles shortly Omidvar promised that he would treat him thereafter. selling his father’s entire song catalog, con- “like a son.” More recently, Pullman has been strik- tending that he had agreed to sell only half Over the course of eight years, according ing deals with Omidvar clients like Daryl of it. The letter alleged that Pullman had to Cleveland’s lawsuit, Omidvar made him Cleveland under which he, in essence, buys wrongly represented himself as a lawyer almost 200 loans. The terms ranged from their claims against Omidvar, and then sues when they first met and that Pullman “lied five to 18 months, and the amounts from him for large sums, alleging that Omidvar every step of the way.” $31 to $44,426, with an interest rate of 72 engages in predatory lending. Pullman, who denies the allegations and percent a year, plus a “processing fee” typi- Pullman says that in 2004, he paid calls the letter “questionable,” kept up the cally of 20 percent. Cleveland roughly half a million dollars for fight, pursuing one of Omidvar’s compa- royalties on his music library. The agree- nies, Currency Corp, for breach of contract. ENTER PULLMAN ment also granted Pullman the right to join A year later, Cleveland signed a court dec- Cleveland was chafing under these terms Cleveland in suing Omidvar for $2.5 mil- laration in support of Pullman’s case. in 2005 when David Pullman, the bond lion for allegedly charging excessive interest A jury eventually found that Currency dealer, offered to help. rates and fees. had charged interest and administrative fees When Pullman created song-royalty Omidvar denies the allegations. Cleve- exceeding legal limits on approximately 44 bonds for David Bowie, the concept of issu- land could not be reached for comment. notes in amounts under $5,000. It awarded ing debt backed by a steady stream of music The case took a surprise turn in June Pullman $38,554, less than half of what he royalties captivated investors. Pullman put 2006, when Cleveland settled with Omid- had sought, plus $142,000 in legal costs. together multi-million-dollar issues for the var for $18,000. Cleveland received nothing beyond the Isley Brothers, James Brown and Marvin Two months later, Robert Besser, a law- original $18,000 settlement. Gaye, and trademarked them as “Pullman yer representing Cleveland and Pullman, Today, Omidvar and Pullman are fight- Bonds.” By 2004, Moody’s Investors Ser- received a fax signed by the songwriter. ing over the heirs of producer and musi- vice had rated the original Bowie Bond one It stated that Cleveland had been tricked cian Gene Page, whose songwriting credits notch above junk status. Today, Pullman by Pullman - it didn’t specify how - into include “You’ve Lost That Lovin’ Feeling,” buys royalties outright from artists who are a hit for the Righteous Brothers. He also looking to sell. worked with Diana Ross and Lionel Richie. Follow Reuters Special He doesn’t shy away from conflict. In Reports on Twitter: Page died in 1998 at age 57. His son, the late 1990s, Pullman sued former busi- @SpecialReports Chris, recalls in an interview that at the fu- ness partners for billions of dollars, alleging neral, Omidvar hugged him. “He told me

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that my dad told him to look after us,” says In addition, the Pages claimed they didn’t Chris, who is 41 and works as a personal know how much Gene Page’s songs were fitness trainer in California. “I trusted him.” earning in royalties. Pullman says they fi- That feeling was strengthened when he saw nally learned that the royalties totaled nearly his father’s gold records lining the walls of $2 million between 1988 and 2009, averag- Omidvar’s office. ing about $95,000 a year. The family claims Omidvar had some bad news, too: He it received almost none of that money. told the family Gene had died owing hun- As the Pages saw it, Omidvar was strip- dreds of thousands of dollars to the Internal ping them of their royalties while borrow- Revenue Service and to Currency Corp, ac- ing from them at rates much lower than cording to court filings. the rates at which he was lending to them, In the ensuing years, Page’s widow, creating a perpetual cycle of debt. Maibell, regularly received money under Omidvar says the Pages’ claims are “all a complex arrangement of loans to and mumbo jumbo.” Maibell knew she was bor- from Omidvar. rowing money all along and liked it that way, There was the $600,000 death ben- he says, because it reduced her taxes. He points efit from her husband’s musicians union. out that she signed and initialed each note. Omidvar managed that money through a In 2010, the Los Angeles Superior company called Tiffany Ventures to invest TURNING TABLES: Gene Page and his wife, Court ordered Omidvar to pay Pullman in real estate, using funds borrowed from Maibell, both deceased, are featured as happy and Maibell Page $735,192.29, plus costs. the death benefit. customers on an Omidvar website, though Omidvar is appealing the judgment. In For the nine years following Gene’s death, the Page family sued the lender for predatory January 2011, he unsuccessfully sued the Omidvar also wrote the Page family com- practices. Pages for breach of contract. mercial loans at 2 percent, compounding ev- Maibell died in August from lung can- ery 10 days, or equal to 72 percent annually, cer at age 71, 14 years to the day after her plus a 20 percent “processing fee,” according and violated the Elder Abuse Act. Pullman husband’s death. to documents in a lawsuit the Pages subse- said Maibell agreed to sell her interest in Gene and Maibell Page are still featured quently brought against Omidvar. In turn, the songs because it would free her from in a testimonial on Omidvar’s Royalty Ad- Omidvar collected Page music royalties. Omidvar’s debts. vance Funding website. “Thanks for being But when it became clear in court pro- so reliable and for doing so much more SWITCHING SIDES ceedings that the money Maibell had been than you have to for me,” Maibell says in In 2006, Pullman approached Maibell. She receiving for years wasn’t from her hus- a quote that appears above a picture of her thought he was offering a written deal to band’s death benefit, as she had thought, embracing her husband. “I really appreciate audit Omidvar’s management of the fam- but constituted loans from Omidvar, the your help.” ily’s finances, according to a lawsuit Maibell Pages switched sides. The family withdrew subsequently filed against Pullman in Los its lawsuit against Pullman. He returned Editing by Michael Williams and John Blanton Angeles Superior Court. Several months the Page royalty rights to the family, and later, the widow realized that by signing the two parties joined forces in a lawsuit in FOR MORE INFORMATION papers with Pullman, she had actually sold the same court against Omidvar, alleging Robin Respaut him her husband’s royalties, along with the predatory and fraudulent lending practices. [email protected] right to sue Omidvar, for $100,000, minus According to documents in the suit Atossa Abrahamian any debts she owed to Omidvar, according against Omidvar, Tiffany Ventures paid Mai- [email protected] to court documents. bell an annual interest rate of 5 percent on the John Blanton, Enterprise Desk Editor That suit alleged that Pullman “tricked loan from the death benefit, later reduced to [email protected] Page into signing documents that effec- 2 percent – rates much lower than what he Michael Williams, Global Enterprise Editor tively transferred her interests in royalties” was charging on some of his loans to Maibell. [email protected]

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