Peter Hook Sues New Order Over Unpaid Royalties

Bassist accuses former bandmates of creating new company and marginalizing his stake in future earnings

Peter Hook is suing his former New Order bandmates for "millions of pounds" in unpaid royalties Credit: Carl-Mickael Andersson/Corbis

Peter Hook is suing his former New Order bandmates for "millions of pounds" in unpaid royalties, as the bassist accused members Bernard Sumner and Stephen Morris of marginalizing his stake in the band by "clandestinely" forming a new company to control the New Order trademark, the Manchester Evening News reports.

After New Order split up in 2007, Hook retained a 25 percent stake in Vitalturn Company Ltd, a company the band created following the demise of Factory Records in the early Nineties.  However, prior to New Order's return in 2011, Sumner, Morris and keyboardist Gillian Gilbert transferred the band's assets and trademark to a new company – New Order Limited – owned by the three of them, paying a five percent royalty to Vitalturn Ltd., of which Hook receives 1.25 percent.

As Hook's lawyer Mark Wyeth told the court, "It was as though George Harrison and Ringo Starr had got together at George’s house one Friday night and had acted together to divest Paul McCartney of his shareholding in the Beatles, and didn't tell Yoko about it either."

As a result of the new company, Hook has only received 1.25 percent of the band's royalties instead of a 12.5 percent stake of the band's royalties, merchandising and performance fee that he argues he is entitled to. In court, Hook's lawyer argued that New Order have earned over £7.8 million (roughly $11.75 million) in the past four years, and the former bassist was owed approximately £2.3 million as of October 2014; since then, New Order have released their latest LP Music Complete.

New Order's lawyer David Casement argued that the band's formation of a new company was "completely reasonable" and that Hook's lawsuit was "completely misconceived." Casement also suggested that Hook's suit was either his attempt to hinder New Order from future success or, possibly, that the lawsuit was being used as leverage by Hook in an effort to "rejoin the band."

However, the judge overseeing the case dismissed the idea that Hook's "true motive was to get back into the band or spite the defendants." The judge also recommended that both parties reach an amicable settlement outside the court, as taking the matter to trial could cost a million pounds in legal fees.

In a statement issued exclusively to Rolling Stone, Hook says, "I'm naturally delighted with the decision made on my application to the High Court in London last week. It found in my favor and justifies the stance I have taken.  The Judge made a number of important points when giving his judgment and rejected a lot of the Defendants' submissions. Both sides' costs in this case are very substantial. I was obviously pleased that the Judge ordered the Defendants to pay mine. I'm very happy with the outcome and it bodes well for the future. I am grateful to my legal team for the hard work which went into achieving this judgment."

A representative for New Order did not immediately return Rolling Stone's request for comment.

In 2013, Rolling Stone spoke to Hook about New Order's decision to continue on without him. "I felt betrayed by the way they did it because they did it without consulting me and without asking my opinion," Hook said without divulging details of the New Order Limited formation. "As Bernard explained … they found a legal way to do it, that I couldn't stop them. Not that I would have stopped them anyway. They just presented it completely as a fait accompli, and I heard in the same way as everybody else heard on the radio. So it's not a good start, is it?"

Hook continued, "What I am protesting about – what I am still very unhappy – is the business arrangements that they left for the company that owns the New Order trademark. Them three have decided what I should be paid and I think the four of us should have decided what I should have been paid. Them three are happy with the arrangements of what I get paid and I'm not. I'm seeking a legal remedy to that, and that's where we're at the moment. They refuse to cooperate, they refuse to negotiate and that's it."