Proper Group (formerly Utopia Music) has been ordered to pay $1.86 million by the U.S. District Court for the Southern District of New York, relating to their 2021 acquisition of advance provider Lyric Financial.

The dispute centers around an $8 million purchase agreement for Lyric Financial, which was structured as a $5 million upfront payment followed by two $1.5 million installments. When the second installment allegedly went unpaid, Lyric Financial's former owners initiated legal action.

Key points of the case:

• The London Court of International Arbitration initially heard the case
• Proper Group's defense claimed Lyric Financial failed to meet transaction terms
• The arbitration ruled in favor of the sellers
• The New York federal court has now "granted in its entirety" the petition to recognize the arbitration award

The final award amounts to $1,862,995.54, plus interest calculated from July 3rd until the date of full payment.

This legal dispute is part of a larger pattern of challenges following Utopia/Proper's aggressive acquisition strategy in 2021-2022, which led to:

• Bankruptcy proceedings
• Contractual difficulties
• Employee layoffs
• Executive restructuring
• Several businesses being re-purchased by their founders
• The sale of certain holdings (including Sentric to Believe for over $50 million)

While the court has made its ruling, the focus now shifts to whether Proper Group will fulfill the payment obligation to the plaintiffs.

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