Hipgnosis Songs Fund Limited (LSE:SONG) has launched a High Court claim against its founder and former investment advisor Merck Mercuriadis and his company, Hipgnosis Songs Management (HSM).
The music royalty investment trust said it is planning to launch a Part 20 claim in the High Court to seek full indemnity from Mercuriadis and HSM.
Mercuriades, HSM and SONG were served with High Court proceedings last year by an earlier firm founded by Mercuriades, called Hipgnosis Music Limited, for allegedly diverting business opportunities.
Hipgnosis is looking to protect itself from any liabilities which could arise because of this alleged misconduct, where the claimant is seeking to recover a substantial sum.
Earlier this month, the fund said it was planning to obtain an indemnity from Mercuriadis and HSM, which is predominantly owned by US investment giant Blackstone.
High Court proceedings were initiated against Mercuriadis and HSM, but they refused to indemnify the Songs Fund and instead are rigorously defending the claims, which they argue are without merit.
The fund is concerned as it is not insured against the cost of any misconduct claims.
Mercuriades is still listed on Companies House as a director of Hipgnosis Music Limited, which appointed a liquidator in 2021 but has recently secured litigation funding.