Country music star Travis Tritt is seeking at least $10 million in damages from a Nashville record label owned by Haven Healthcare CEO Raymond Termini, claiming that his career has suffered "irreparable damage" because of the company's "false, unfair and deceptive acts."
In a lawsuit filed Tuesday at U.S. District Court in Nashville, the two-time Grammy winner charges that he was induced to sign a contract with Termini's Category 5 Records in December 2005 based on false promises, including Termini's assertions that he was "a man of substantial means and wealth" who would pour his personal fortune into the company.
"Tritt was not aware that Haven Healthcare had invested in or otherwise had any relationship with Category 5 until these recent news reports," the lawsuit says, referring to disclosures in The Courant last month that Termini had used assets of the nursing home chain to launch the record label.
Termini made "misrepresentations of material fact to Tritt, representing that Category 5 was competent and financially sound and backed by Termini's personal wealth," the lawsuit says.
Termini said through a spokeswoman late Tuesday that he had not been served with notice of the lawsuit and would not comment until he had a chance to review it.
In a 16-page complaint, Tritt said that he agreed to sign with Category 5, despite initial reservations about its lack of experience, based on Termini's assurances that Tritt would have broad "creative and marketing input." But he said that his agreement with Category 5 began to unravel soon after it was signed, when the record label reneged on a promise not to sign other recording artists without first consulting Tritt and his management team.
Tritt also charged that Termini mismanaged the release of his album "The Storm" in August 2007, misspending advertising and promotion money and firing "most of" the label's employees prior to the release of the album's second single to the radio market.
"All of these steps, and others, were in violation of the representations that Termini had made to Tritt to induce him to sign the agreement with Category 5, were disastrous to the success of the initial release of 'The Storm' and the release of its second single," the suit says.
Tritt claims that Termini then refused to reimburse him for some of his travel costs to promote the album, leaving him to pay more than $307,000 out of his own pocket. In addition, the suit claims that Category 5 has defaulted on paying Tritt more than $190,000 in royalties owed to him.
Termini acknowledged to The Courant last month that he had used more than $8 million in proceeds derived from his nursing home companies to launch Category 5 Records. He said that the money came from a refinancing loan obtained through Haven Healthcare's parent company, and that the transaction did not affect the chain's ability to pay bills or its patient care.
But auditors with the state Department of Social Services and Attorney General Richard Blumenthal have said that the diversion of funds is a major reason that the chain is now in bankruptcy, with liabilities exceeding $46 million.
Blumenthal has charged that Termini and other company officials improperly diverted millions in government funds intended for patient care to the record label and other purchases, leaving nursing home bills for basic utilities, such as heat and electricity, unpaid. The chain also has been fined at least 45 times by state and federal health officials for serious patient-care deficiencies in the past three years.
Tritt's manager, Duke Cooper, said in an interview late Tuesday that Tritt "never would have done business" with Termini if he had known that any of Haven's nursing homes had been cited for serious patient-care violations.
"Ray just totally misled us, all the way around," Cooper said.
In the lawsuit, Tritt alleges that Termini's failure to disclose the "investment by Haven Healthcare into Category 5 and the reported sum of that investment" constitutes an unfair trade practice that violates Tennessee's consumer protection law.
He also alleges that Termini has "directly threatened to harm Tritt's future career" by making disparaging comments about Tritt and his management team to other record labels.
Without Tritt, the fate of Category 5 Records - housed in a $2.1 million building that state social services auditors say Termini purchased with proceeds from nursing home operations - is uncertain. In the lawsuit, Tritt described the record company as virtually "defunct" and "expected to close its doors within a matter of days." Category 5 was not included in Termini's bankruptcy filing.
Last month, The Courant reported that several managers on Haven Healthcare's payroll were working for Category 5 Records, and that a group of Haven maintenance workers had gone to Nashville early this year to help renovate the record label's building. The bulk of Haven's funding - including money for salaries - comes from government Medicaid and Medicare money.
Contact Lisa Chedekel at firstname.lastname@example.org.