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Great Entertainment Merchandise, Inc. v. VN Merchandising, Inc.
United States District Court for the Southern District of New York
1996 WL 355377 (1996)
Great Entertainment Merchandise, Inc. (GEM) (plaintiff) would acquire the merchandising rights to the names and likenesses of artists. GEM sought to obtain a trademark license of singer Vince Neil (defendant) so that it could manufacture and sell merchandise ahead of his upcoming tour. Neil established the loan-out company VN Merchandising, Inc. (VN) (defendant) to hold his rights and ability to issue licenses of his trademark. VN entered into an agreement with GEM, allowing GEM to obtain a license to Neil’s trademark in exchange for a $1 million advance on the expected royalties. The agreement stated that Neil agreed to perform before at least 800,000 paying attendees and that should he not, GEM had the right to recoup its advance. Simultaneously, Neil signed an inducement letter to ensure that he subscribed to the obligations of VN’s contract. At the conclusion of the tour, Neil had performed before only 533,032 attendees. Thus, GEM sought recoupment of its advance and demanded repayment from VN and Neil. Neil refused to pay, and GEM filed suit for breach of contract, alleging against Neil that the inducement letter made him a guarantor of its contract with VN. Neil argued that the letter required him only to use his best efforts to meet his personal obligation of performing before 800,000 attendees. Following discovery, GEM moved for summary judgment. VN conceded liability and did not oppose the motion.
Rule of Law
Holding and Reasoning (Sand, J.)
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