NEW YORK—In a flash and unexpected move, attorneys representing the Rolling Stones have filed a whopping $7.5 million suit against Allen Klein, ABKCO Industries, and ABKCO Klein Corp., alleging that Klein, either through ABKCO Industries or other companies which Klein had established to handle the music publishing and subsidiary rights to the Stones’ material, had made “false or fraudulent” representations with intent to “deceive and defraud” the group and various of its individual members.
In response, Klein said in a formal statement issued through the New York-based public relations firm of Solters & Sabinson:
“The attorneys for the other defendants including ABKCO Industries, Inc., have not had a reasonable opportunity to study the complaint, which was served only yesterday [September 1, 1971]. ABKCO, however, in connection with its nine month earnings report issued on August 17, 1971, denied any impropriety in their dealings with the Rolling Stones and further declared that they believed the Rolling Stones’ lawsuits to be without merit. Speaking only for myself, however, I believe the allegations are at best ludicrous, and at worst, malicious.
“The transactions apparently now complained of by the Stones date back to 1965 and 1966, and such transactions, including ownership of American Nanker Phelge Music, Ltd., and Gideon Music, Inc., were fully disclosed to them at the relevant times and also to their independent advisors, whom the Stones have frequently changed. Moreover, in the proxy statement issued in connection with the acquisition in 1968 of Allen Klein and Company, Inc., by Cameo Parkway Records, Inc., now ABKCO, the ownership of these companies and the various contractual relationships between these companies and the Stones were fully and publicly disclosed.
“The Stones, according to newspaper stories, have recently ‘dropped out’ of England to live in France for tax reasons. Apparently, the New York and English lawsuits are an attempt to rewrite both history and their agreements in order to bludgeon ABKCO into accelerating, during this dropout period, the balance of the guarantee payments due them over the next 17 years. These long term guarantees presently are in excess for $3 million, subject to various offset for loans and advances made to them.”
The Stones maintain in their lawsuit that at the time the financial representations were made to them, they were known to be false, and Klein willfully concealed the true facts from them. They claim that Klein was attempting to induce them to authorize him to operate Nanker Phelge New York – the Stones’ US record production company – as its nominal owner; authorize him to negotiate and execute agreements relating to Nanker Phelge, and further induce the Stones to entrust Klein with the responsibilities generally exercised by a business advisor, tax consultant, accountant, and manager in relation to Nanker Phelge. The Stones claim to have suffered monetary damages in the sum of at least $2 million.
The suit further alleges that Klein attempted to deceive Mick Jagger and Keith Richards through Gideon Music, another of Klein’s satellite business concerns, in much the same way as the acts detailed as being executed through Nanker Phelge. They ask for damages of $1.5 million.
The Stones’ suit further states that it is the duty of Klein to assign and transfer all of the money and property in Klein’s and the other defendants’ possession properly belonging to the Stones and the individual members of the group.
The Stones ask for punitive and exemplary damages above the sums already cited in the sum of $7.5 million for other damages incurred both as individuals and as a group.
The Stones’ legal action is only the latest headache for Klein. He is reported to be awaiting trial in New York on tax charges.
This story is from the October 14, 1971 issue of Rolling Stone.