Deal in the Sky: Journey Bandmates Agree to Court-Appointed Neutral to Resolve Endless Deadlock

Artistes

A month after Jonathan Cain filed a lawsuit against Neal Schon complaining of a “toxic environment,” a judge has appointed a custodian to help break ties.

Arnel Pineda, Neal Schon, Jonathan Cain, Todd Jensen, Deen Castronovo and Jason Derlatka of Journey

Brian Ach

The most recent legal battle between Journey members Jonathan Cain and Neal Schon appears to be over after Schon conceded to the appointment of a neutral third party to resolve the “deadlock” that Cain has claimed is crippling the band’s operations.

In an order issued Wednesday (Aug. 28), a Delaware judge appointed a so-called custodian to break ties between the two longtime bandmates. The ruling came a month after Cain sued Schon seeking such an umpire, claiming their endless disputes pose “a severe threat of harm” to the band’s “storied history of musical greatness.”

The order comes after Schon agreed to the appointment of such a neutral. In his written ruling, the judge wrote: “Schon does not oppose the court’s appointment of a custodian with the power to act as a third, deadlock breaking director.”

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In a statement, a spokesman for Cain said he was “elated with the outcome and looks forward to moving beyond this matter so that Journey can continue the band’s 50th Anniversary Freedom Tour.” An attorney for Schon did not immediately return a request for comment.

Legal battles are nothing new for Cain and Schon, the two key remaining members of an iconic rock band that’s still printing money decades after its “Don’t Stop Believin’” heyday. The two have repeatedly fought in court over the band’s finances over the past two years.

Filed by Cain last month in Delaware’s Chancery Court, the new case largely rehashed those same disagreements over spending — like Cain claiming that Schon unilaterally charts private jets and lavishly spends band funds on personal expenses.

But in technical terms, the case focused narrowly on the governance of Freedom 2020 Inc., a Delaware-based corporate entity they created to operate Journey’s touring. Since Cain and Schon each control exactly 50% of the company, the lawsuit says the two have reached an impasse that has spilled into many aspects of the band’s operations.

“The deadlock between the company’s directors is now interfering with the company’s ability to take even the most basic actions and is causing significant disruptions in the smooth operation of the company,” Cain’s lawyers wrote.

Wednesday’s order aims to resolve that situation by naming Joseph R. Slights, a former Chancery Court judge, as a custodian — a court-appointed official who can cast tie-breaking votes in corporate disputes.

To carry out those duties, the judge said that Slights will be able to “retain advisors or professionals, including music-industry advisors, attorneys, accountants and other professionals,” in order to decide how to resolve disputes between Cain and Schon.

Slights will have his work cut out for him. The complaint lodged last month painted a picture of extreme dysfunction within Journey, ranging from spending decisions to managing employees.

“Petitioner and respondent are deadlocked with regard to issues concerning the hiring and firing of company employees and Band crew members,” Cain’s lawyers wrote in the lawsuit. “It is common that one director will terminate an employee or crew member, and hours or days later, the other director will rehire that same individual.”

In a Facebook post last week, Schon said the accusations leveled by Cain were “slanderous” and that he “can’t stress enough how much it upset me and how wrong they are.” But he hinted that a deal was close to resolve the lawsuit by appointing a neutral third party like Slights.

“We’re going to bring in someone impartial to help us resolve our disputes, bring clarity to what we’re doing and allow us, as a band, to get back to what we should all focus on — making music and performing for our fans,” Schon wrote at the time.

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