The microcap concert streaming company billing itself as the next live music ESPN faces a growing number of civil lawsuits from former employees, former investors and unpaid lawyers and salespeople. LiveXlive was sued last month by XACT Data Discovery for over $ 480,000 in unpaid invoices. XACT had been hired by LiveXLive’s attorneys at Latham Watkins who in May 2019 took over the defense of an investor lawsuit after the former LiveXLive attorney stopped defending the company for non- payment. In October, Latham Watkins also asked the judge to be released from the case, saying LiveXLive had “not paid a single bill” and had racked up more than $ 650,000 in unpaid bills.
The unpaid legal bills are linked to a multi-year lawsuit with former investor and employee Joe Schnaier, whom Ellin called a “dumb”, “jerkoff” and “fucking clown” during the 2017 negotiations for the company. Schnaier, Wantickets. After LiveXLive bought Wanticktets in an all-equity deal, Ellin reportedly convinced Schnaier to invest an additional $ 1.25 million in LiveXLive. But weeks after the deal was struck, Ellin began sending threatening text messages to Schnaier, claiming he owed him hundreds of thousands of dollars and would fire Schnaier employees if he wasn’t. not paid.
“(V) you better wire the 50k today or I start firing people with no more games,” Ellin wrote on May 25, claiming that Schnaier had him $ 650,000 for newly discovered “liabilities” at Wantickets. Ellin wanted “600k Tuesday or all hell breaks loose.” The next day Ellin wrote “the first guy got fired today” followed by taunts like “the next firing coming”, “other people will go by the Friday clown”, followed by a happy text on June 16th. when Ellin learned that CFO Richard Blakely’s two sons worked at Wantickets. After firing the siblings, Ellin wrote “dope wire the money”.
Blakely was then fired, and with no one left, Ellin let Schnaier know that the $ 10 million in shares Schnaier received in exchange for Wantickets, along with the $ 1.25 million in shares. preferred shares that Schnaier had purchased were limited so that Schnaier could not trade or sell his shares. “My shareholders always win, but you will never get your shares,” Ellin wrote in a farewell to Schnaier.
Schnaier is suing LiveXLive for fraudulent inducement, breach of his agreement with the employer and a number of other charges relating to his time with the company. The case is currently being heard by the New York Supreme Court.