On Tuesday, lawyers for Schon and Cain filed a lawsuit in the Superior Court of Contra Costa County, California, alleging that Smith and Valory tried to launch “a coup to assume control of one of the band’s corporate entities, Nightmare Productions, Inc.” The suit claims that Smith and Valory incorrectly believed that controlling Nightmare Productions would allow them to gain control of the Journey mark, thus providing them “windfall payments in the millions of dollars… after their retirement.”
The suit calls Smith and Valory’s alleged scheme “not only malicious but also very ill-conceived.” It states that Nightmare Productions does not control the Journey name, but that Nightmare Productions granted an “exclusive, irrevocable license of the Journey Mark” to another band entity, Elmo Partners, which was started by Cain, Schon and former lead singer, Steve Perry. Nightmare Productions purportedly granted Elmo Partners the exclusive license to the Journey trademark back in 1985; when Perry left the band in 1998, he signed an agreement allowing Cain and Schon to keep recording and touring under the Journey name.
Skip Miller, a lawyer for Schon and Cain, tells Rolling Stone: “The contracts are clear on their face. The Journey name is controlled by Neal Schon and Jonathan Cain. And for very good cause, they don’t want to perform with Smith or Valory anymore, they don’t want to have anything to do with them, and that’s their right. They’re going to go on with Journey, continue with the great success of the past and these two guys are going to get replaced.”
Smith and Valory did not immediately return a request for comment.
According to the suit, Smith and Valory launched their plan to oust Cain and Schon from Nightmare Productions and take control of the group last December, although things didn’t start to take shape until January 31st. That day, an attorney named Daniel Schacht sent sent emails to convene back-to-back meetings for the shareholders and board of directors of Nightmare Productions. The notices called for increasing the number of board members from three to six, allegedly allowing Smith, Valory and two of their allies to join it, and then using the reconstructed board to replace Cain with Smith as president of the board.
While the letters Schacht sent ostensibly boasted an electronic signature from Cain, the suit claims that “Cain did not approve of the notices and did not sign them. On information and belief, Smith and Valory directed Schacht to send the Notices.”
Nevertheless, the complaint states that the two meetings went ahead as planned February 13th, resulting in Smith replacing Cain as president of the board and Valory replacing Schon as secretary. The suit alleges that “Smith and Valory believe that they now control the Journey name and can force Cain, Schon and Nightmare Productions to pay them a share of Journey touring revenue in perpetuity while they do no work for the band.” It goes on to say Smith and Valory’s “coup drove a dagger between band members” and that the pair “placed their own greed before the interests of the band, sowing discontent and discord, jeopardizing the future of Journey.”
As such, Schon and Cain’s lawyer sent a letter to Smith and Valory Tuesday, March 3rd, that stated: “Effective immediately, you are no longer members of the band Journey and cannot perform under the name Journey. If you act in contravention of our clients’ rights, please be advised that we will take all legal steps to protect the rights of our clients.”
The lawsuit, meanwhile, is seeking “damages in excess of $10 million,” plus additional damages. It’s also seeking declaratory judgments that Elmo Partners holds the exclusive rights to the Journey name and that the actions taken at the February 13th meetings are invalid.