Hipgnosis Sogns Fund launches legal claim over indemnity

(Sharecast News) - Hipgnosis Songs Fund updated the market on its pursuit of an indemnity from its founder Merck Mercuriadis on Monday, as well as Hipgnosis Songs Management Limited, the investment adviser majority-owned by funds linked to Blackstone. The FTSE 250 music rights investor was taking the action in response to the initiation of High Court proceedings against Mercuriadis, the investment adviser, and the company.

It said the investment adviser, established by Mercuriadis, who serves as a director, had declined to offer indemnification against potential liabilities arising from allegations of misconduct attributed to Mercuriadis.

Hipgnosis Songs Fund said it had received previous assurances from Mercuriadis and the investment adviser over the meritless nature of the claims and their intent to vigorously defend against them.

However, the company said it lacked insurance coverage for the costs associated with the legal action.

As a result, Hipgnosis Songs Fund said it was planning to initiate a Part 20 Claim in the High Court against the investment adviser.

Through that legal avenue, the company said it was aiming to secure a comprehensive indemnity.

At 0921 GMT, shares in Hipgnosis Songs Fund were down 0.91% at 65.5p.

Reporting by Josh White for Sharecast.com.