He Was The Man, But Was He the “Key Man”?

The record label Roc Nation is suing its insurer, HCCI International Company, for failure to pay on a Key Man policy insuring the life of Jordan Feldstein, the founder of Career Artist Management, who died in 2017. Roc Nation, co-owned by Jay-Z and Live Nation, acquired Feldstein’s company In 2016, mostly because of Feldstein’s close relationship with the group Maroon 5. The expectation was that the partnership would result in tens of millions of dollars of revenue, but as a result of Feldstein’s death Roc Nation lost Maroon 5, along with about $37 million profit, by the company’s estimate. Plaintiff’s counsel Reed Smith, is seeking both compensatory and punitive damages, claiming the policy was written in a way that left several crucial terms ill-defined. A question before the court is whether the insurer can make deductions against the $12.5 million policy, including post-mortem revenue “associated” with Feldstein’s lack of participation over the expected term of the partnership. According to Roc Nation, the better way to assess financial losses would be to ask what Feldstein’s continued involvement would have meant to the company.