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Record Company Wins Over Cutout Losses

July 22, 1987

LOS ANGELES (AP) _ MCA Records was not responsible for losses suffered by a distribution company that purchased $350,000 worth of budget records from the industry giant, a U.S. District Court jury has ruled.

New Jersey-based Scorpio Music had sued MCA for $3.5 million in damages in March 1986, alleging the company participated in a racketeering scheme masterminded by MCA executives and reputed organized crime figure Salvatore Pisello.

Scorpio later agreed to drop the racketeering charges and base its position solely on breach-of-contract allegations.

″We feel it was a just verdict, well supported by the facts,″ Dennis Kinnaird, an attorney representing MCA, said following Tuesday’s court decision.

Scorpio claimed Pisello, MCA executives and independent distributor Ranji Bedi had talked Scorpio into advancing $350,000 in cash for 1.1 million of the budget recordings, known as cutouts. Scorpio said the money from the 1984 sale illegally was converted for personel use and that Pisello and Bedi had acted as agents for MCA.

Scorpio claimed it received only 140,000 of the recordings and was refunded less than half of the advance money.

In March, MCA lost the 1986 suit it filed against Scorpio charging the company had manufactured and sold counterfeit records of various MCA artists.

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