CREEM in court

In the civil lawsuit involving Jacob J. Kramer, the son of CREEM magazine's late founder, and the corporation that now owns the rights to the magazine's "intellectual property" — articles, photos and illustrations that appeared in the magazine over the course of its 19-year run, as well as the name CREEM itself — one fact is not in dispute:

In April 2006, Kramer and partner Chris Carter each handed over $25,000 to Robert Matheu, president of CREEM Media Inc. At that point, Matheu was negotiating the purchase of the magazine's intellectual property rights from Los Angeles businessman Arnold Levitt, who had acquired CREEM in the mid-1980s after it had briefly ceased publication and gone into bankruptcy.

No contract accompanied the transfer of funds from Kramer (who is a New York-based trademark lawyer) and Carter, a Los Angeles disc jockey and musician, to Matheu.

Kramer and Carter allege that Matheu promised them a 60 percent interest in the company in return for their investment. In documents filed in a New York court, they also claim that their money was used by CREEM Media to purchase the CREEM name and associated rights from Levitt.

William Kerr — the New York attorney who represents CREEM Media, Matheu and two others associated with the company — says Matheu only promised Kramer and Carter (who previously invested an additional $5,000 in the company, according to the lawsuit) that he would attempt to help them obtain a portion of the company and/or a place on its board of directors. Matheu, explains Kerr, was in no position to offer anything more, because any deal involving stock or board seats is a corporate decision and not something Matheu could personally decide.

As for the $50,000, says Kerr, it went into a corporate account where it was "co-mingled" with other company funds before the purchase from Levitt.

Kramer and Carter filed their suit in November 2006. Kramer and Carter attempted to have a judge halt publication of a CREEM anthology compiled by Matheu — who had been a freelance photographer for the magazine since the late '70s — containing articles, photos and illustrations that had appeared in the original publication. That attempt ultimately failed after HarperCollins argued financial hardship if publication was stopped. The book was published in November. (The court did order an injunction, however, forbidding CREEM Media from spending any company money until a settlement is reached.)

The publishing house paid a $65,000 advance for the book; it is not clear if that money went to Matheu or CREEM Media.

Kramer and Carter are asking the court to award each of them a 30 percent interest in the company. They have also alleged that Matheu committed fraud and are seeking $767,000 each.

According to attorney Kerr, his clients have done nothing improper and have offered to return the $50,000 plus interest to Kramer and Carter. In an attempt to settle the dispute, Kerr says, the judge presiding over the case has ordered mediation, which is scheduled for February.

Legal fight haunts mag's
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