TLC's expedition to court may change the balance of financial power from label to artist in a way that George Michael's contract squabble failed to do. In the opposite corner, TLC's management and record company, LaFace, are protesting that the women are simply misusing the law to pressure them into re-negotiating their record contract.
"The case has serious implications," says Dennis Hall, a lawyer for one of the group's creditors. "If TLC win a new deal, then anybody else with a bad contract who hits it big might want to do the same thing."
Whether by coincidence or by design, bankruptcy is becoming a popular negotiating tool. In the past 18 months, two other groups - rappers Run-DMC and an R&B group called Silk - have threatened similar actions and quickly emerged with better deals.
What has caused a stir is the group's decision to file, given the scale of their success. Their two albums have notched sales in excess of eight million units and spawned numerous hit singles.
However, TLC's lawyers claim the girls' deal is unfair and that they can't pay their bills - partly because their deal gives them too small a cut of the revenue from record sales. "It's a matter of being fair to the artist," says David Bisbee. "Record companies have to keep in mind that, without artists, they don't have anything."
Lawyers opposing TLC's bankruptcy say the trio is due at least $2.2m in royalties and are, at worst, facing a cash-flow problem." We offered to give them a substantial advance against that payment and they declined; we offered to re-negotiate and they refused," said Kenneth Kraus, a lawyer representing LaFace, in a New York Times report on the case. Bankrupt or not, TLC are not known for profligate lifestyles, preferring catalogue- ordered jewellery to Tiffanys', and Jeeps to expensive foreign cars. Consequently, LaFace Records insists that the women have exaggerated their problems, not least by including a claim that they owe money to the company, which it denies.
This is not the first time a member of the group has come up before the beak. In June 1994, Lisa Lopes gathered her boyfriend's athletic shoe collection and set it alight, burning down his house and running foul of Lloyd's, who are looking to her to cover a $1.3m insurance pay-out.
A successful outcome for the girls will make such a route an attractive one for upcoming acts selling more than they were expected to, but there is also a simpler solution for the industry - offer more generous contracts from the start.Reuse content