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North Sea Jazz Festival 2019 : Day Three
Daryl Hall & John Oates perform at the 2019 North Sea Jazz Festival in Rotterdam, The Netherlands. Photo by Peter Van Breukelen/Redferns/Getty Images

What to know about the Hall & Oates legal fight, and the business at stake behind the music

NASHVILLE, Tenn. (AP) — After more than a half-century of making music together, Daryl Hall is suing John Oates and arguing in arbitration that he can't sell his share of a Hall & Oates business partnership without Hall's permission.

Public court filings have revealed just how wide the rift has grown between the duo famous for hits in the 1970s and '80s, including "Maneater," "Rich Girl" "Kiss on My List" and "I Can't Go for That (No Can Do)."

Hall has accused Oates of blindsiding and betraying him, saying their relationship and his trust in Oates have deteriorated. Oates has said he is "deeply hurt" that Hall is making "inflammatory, outlandish, and inaccurate statements" about him.

A Nashville judge recently paused the sale of Oates' stake in Whole Oats Enterprises LLP to Primary Wave IP Investment Management LLC until an arbitrator weighs in, or until Feb. 17.

Here are some recent developments.

Why are Hall & Oates going to court?

The dispute went public on Nov. 16, when Hall filed a lawsuit in a Nashville chancery court asking a judge to stop the sale by Oates so a separate, private arbitration could begin. Hall's lawsuit contends that going to court was the only way to ensure the sale by Oates and others involved in his trust didn't close before an arbitrator could weigh in. Hall filed for arbitration on Nov. 9.

Still, the pair's private business holdings and their agreements are largely blocked from public view, even after a judge unsealed many filings. Oates' attorneys have argued that he lived up to his contractual obligations and didn't go behind Hall's back. They have said the case should have remained only in arbitration, while accusing Hall of publicizing issues from what had been a private disagreement.

A judge put the sale on hold the day the lawsuit was filed, then extended that pause last week.

What is the proposed sale timeline?

A court declaration by Hall shows what kind of valuable Hall & Oates materials Whole Oats Enterprises contains, though it does not describe the value, ownership percentage breakdown or sale price for those materials. The declaration cites materials such as trademarks, personal name and likeness rights, record royalty income and website and social media assets.

The musicians had been considering how to undergo a "global divorce" in late 2022, when Hall said he was entertaining Oates' push to dissolve their touring entity and a separate partnership related to their musical compositions and publishing, Hall's declaration says. Hall, meanwhile, proposed dissolving Whole Oats Enterprises.

Their disputes about Whole Oats Enterprises worsened and hit an impasse, leading them to enter mediation in July, Hall's arbitration filing states.

The filing accuses Oates of quietly negotiating a deal with Primary Wave, while letting Hall continue with normal mediation tasks, costing him time and legal fees.

Oates' team entered into a non-disclosure agreement on Oct. 2 without Hall's knowledge that provided Primary Wave confidential information from the partnership. Blind to the Primary Wave negotiations, Hall and his representatives attended an hourslong mediation the next day. On Oct. 19, Hall's attorneys provided Oates' team with proposed settlement documents, though Oates' team still has not commented on them, the arbitration document says.

The next day, Oates sent Hall the transfer notice and letter of intent describing the sale to Primary Wave, according to Hall's filing.

What was Daryl Hall's reaction?

The court fight was initially shrouded by corporate legalese and filings unavailable the public's view. Hall then peeled away the veneer in a point-by-point declaration detailing why he is "deeply troubled by the deterioration of my relationship with, and trust in, John Oates."

Hall's account was filed in early November during arbitration and made public later in the month in the lawsuit. It alleges that Oates and his team engaged in the "ultimate partnership betrayal" by pushing to sell his share while telling Hall's associates that he wanted to maintain his ownership.

Hall alleged that Oates in recent years has become "adversarial and aggressive instead of professional and courteous" toward him. Hall accused Oates of making business demands via a "revolving cast of lawyers."

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Hall said he was two days from leaving for a tour across the West Coast, Japan and the Philippines, when Oates first provided notice of the impending sale on Oct. 20.

Hall said he would have never approved a sale to Primary Wave, and takes issue with its business model. Hall expressed concern about how his name and likeness and other assets could be used.

Additionally, he said Oates' team has not provided him with the confidential information disclosed to Primary Wave, which has already owned "significant interest" in Hall & Oates' song catalog for more than 15 years. The New York-based company has struck deals in recent years to buy stakes in the music catalogs of artists like Bing Crosby, Bob Marley, Stevie Nicks, Whitney Houston and Prince.

Deena Merlen, a Connecticut-based partner at Reavis Page Jump LLP with entertainment law expertise, noted that Primary Wave has struck more than $2 billion in investment deals in about two years, as it buys music rights.

"Primary Wave has been a kid in a candy shop, with a pocket full of cash," said Merlen, who is not involved in the Hall & Oates case. "Not a great stretch to see the temptation for Oates, under the circumstances."

What was John Oates' reply?

In his own declaration, Oates expressed disappointment with his longtime partner's words, saying Hall's accusations of that Oates went behind his back and breached their agreement aren't true. Oates declined to go into specifics, saying he's obligated to keep details private, even if Hall didn't.

Oates argued he had been trying for some time to enhance their business partnership, but Hall has become unwilling to work with him to protect what they created. He also said Hall has been trying for years to be seen as an individual.

According to Hall's arbitration filing, Oates' attorneys have argued the sale is allowed under a section of their business agreement that appears to give one partner a chance to buy the other's share when faced with an outside sale.

Merlen cautioned that without seeing the full agreement — which is under court seal — she can't be certain how the provision works. But she said it appears to be a "right of first refusal," giving non-selling members greater control over proposed transfers, "potentially blocking a sale to a third party they do not want to let in, while at the same time increasing their own ownership stake."

Hall's team has argued other contractual violations void the deal.

"As to whether he (Oates) had the right to do what he allegedly did — or tried to do — with Primary Wave, well, that remains to be seen," Merlen said.

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