The acrimonious case, which casts light on the star's so-called "missing years" between her first hit and her latest success, is being brought by the musician William Galison amid claims of physical abuse, harassment, libel and thwarted ambition. It is expected to be heard at the Federal Court in New York next month. Galison, who has performed with stars such as Carly Simon, Barbara Streisand and Shaka Khan, is claiming $1m (£555,000) in damages resulting from the split with Peyroux.
The dispute centres on the recording of a seven-track CD entitled Got You On My Mind in March 2003, shortly before Peyroux signed with Universal, the world's biggest record label.
Despite a reputation for "fragile artistry" - her record company launched an international search for her after she went missing just as she was poised to hit the big time - this year has been one of corporate glory for the singer. Her music is being promoted by the global coffee chain Starbucks (alongside that of Bob Dylan) and her album Careless Love is a Top 10 success in the UK charts.
But Galison, a jazz harmonica player, is claiming that much of the present interest was due to him. He will tell the court that he in effect rediscovered her playing in a bar in New York in 2002 during the seven-year period in which she "vanished" after the success of her debut album, Dreamland, in 1996.
He told The Independent yesterday that the couple immediately teamed up after the meeting - playing in a series of influential venues such as New York's Bottom Line and Joe's Pub. They also performed with the Dresden Philharmonic Orchestra before an audience that included the former prime minister John Major and his wife, Norma. In the meantime they also moved in together, he says.
"We were romantically involved. She lived with me, she was eating my food. We were romantically involved and we had an amazing act. But suddenly she stopped working with me," he said.
He says Peyroux used the album they had co-funded and recorded at a studio in Brooklyn as a demo for the Universal-licensed label Rounder. After their relationship collapsed, Galison tried to market the record with another label. But the company dropped it after being contacted by lawyers for Rounder, he said.
In a letter to the co-founder of Rounder, Ken Irwin, Galison said: "I am concerned about Madeleine's career and her psychological well-being. You know well that Madi has a history of attempted suicide. Now she finds herself facing a federal lawsuit with no representation and everything to lose. If God forbid, Madi should harm herself as a result of the stress of this episode, it will be her handlers - those who encouraged her to lie and betray her friends for their own selfish motives - who will be to blame."
Rounder's lawyers have suggested that Galison may be using the legal dispute as an "ill-advised attempt ... to trade on the name and reputation of Ms Peyroux to boost his career by passing off an inferior version of a Madeleine Peyroux album".
They also claimed to have obtained "directly and from Ms Peyroux, evidence of numerous incidents of physically and verbally abusive behaviour by Mr Galison against Ms Peyroux".
Galison claims the allegations of abuse are libellous. Peyroux's lawyers will tell the court that such has been Galison's behaviour that the singer has contemplated filing criminal harassment charges. He denies the claim.
Paul Foley, general manager of Rounder, said: "Rounder has no comment regarding any civil action brought by William Galison other than we remain convinced that our position will be vindicated by the court as it has been previously."
The case is due to be heard before Judge Herman Cahn on 28 September.Reuse content