Promoter John Scher filed papers against Covanta, the new owners of the company he founded 30 years ago, Metropolitan Entertainment Group, on January 25 in Superior
Court in Newark, NJ, claiming fraud, disparaging his name and preventing him from making a living because of a three-year non-compete clause. Scher is asking the court to overturn the non-compete and to allow him to return immediately to concert promotion.
Also named in the lawsuit are Steve Mackin, CEO of MEG and parent company Covanta (formerly Ogden Corp.), Covanta execs Thomas Etter and Jeffrey Horowitz, and
Ogden Entertainment, which owns part of MEG.
"Covanta wants to prevent him (Scher) from competing fairly in the marketplace and that's not appropriate," Scher attorney John Lacey told the Star Ledger.
MEG was poised to be bought by Clear Channel Entertainment just before Scher filed his lawsuit, according to industry sources, which has now thrown a wrench into the proceedings.
Here's a summary of events leading up to this latest lawsuit:
Since late last June there had been a power struggle within MEG. Covanta
filed a lawsuit in New Jersey on June 29. Scher was served with papers on July 3,
which led to his eventual replacement in August.
For more than a year, Covanta had been trying to unload its non-energy divisions and apparently had a bid from Clear Channel (then SFX) that Scher rejected. Numerous sources have indicated that if the sale had gone through,
Clear Channel did not want Scher as part of the package. Covanta was able to
secure some minority share votes to push itself over its already 50 percent
share of the company, and in essence remove Scher from power. (In the early
1990s, Scher went to work at PolyGram and convinced the entity to buy half of
MEG. When Scher left PolyGram and returned full-time to MEG, PolyGram
decided it no longer wanted to be in the touring business. Scher found Ogden,
a player in the facility business, to purchase PolyGram's share).
Last August, Scher, then president/CEO of Metropolitan Entertainment
Group, was replaced by Scott Mackin, president/CEO of Covanta Energy Corp.,
formerly Ogden Corporation, which controls the majority of MEG stock.
Scher remained with the company as a member of the Board Of Directors and
headed Metropolitan's record label, Hybrid Recordings.
At the time, Scher stated, "I have put my heart, soul and indeed my entire
professional business life into Metropolitan. I believe we have developed a
solid multi-faceted entertainment company that has a very bright future.
Scott Mackin and the Covanta team want to work with the Metropolitan staff to
ensure that we meet our fullest potential."
Mackin referred to Scher as "legendary" in the industry.
On October 26, Scher acquired MEG's management company, record label and theatrical/TV divisions from Covanta for an undisclosed amount.