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Lawsuits Target Boy Bands’ Promoter

March 8, 2000

ORLANDO, Fla. (AP) _ In the seven years since Lou Pearlman launched the Backstreet Boys on the road to pop music stardom, his recording studio here has become ground zero for the country’s preteen music scene.

It also has been beset by a string of lawsuits involving many of the singers whose careers he launched.

In separate lawsuits, the Backstreet Boys and ’N Sync have accused Pearlman of deception and cheating them out of money. Both groups have since left Pearlman and settled their lawsuits for undisclosed amounts of money.

Yet even with the legal headaches, Pearlman, 45, still has a stable of young singing groups _ many of them plucked from the talent pool of singers and dancers working at Orlando’s theme parks. His groups include C-Note, Take 5, LFO and Innosense, a girl’s group.

``Lou Pearlman has this incredible track record. He’s someone you want to have,″ said Andrea Wong, a vice president at ABC Entertainment who has overseen production of Pearlman’s new television show, ``Making the Band.″

At Pearlman’s Orlando recording studio, his groups go through a boot camp of dance and voice lessons, media training and workouts with trainers. His company picks up their expenses and group members often share a house. Pearlman uses market research to test the songs, looks and styles of his groups.

Louis J. Pearlman, a portly man with glasses and receding hair, grew up in New York City’s borough of Queens and graduated from Queens College. He later got a doctorate in business administration from Century University in Albuquerque, N.M., which offers degrees through correspondence classes.

Although he plays guitar and is a first cousin of singer Art Garfunkel, his interest in the music industry came while running an air charter service, Trans Continental Airlines and Airship International.

Pearlman received a charter request from New Kids on the Block in the 1980s and was astounded to learn that the group had amassed $100 million from record sales, tours and merchandise sales.

``Somebody didn’t realize that the little girl market is still there,″ Pearlman said. ``What we did is we filled the void.″

He did that by marketing the Backsteet Boys. His initial investment in the group was $3 million, but the return has been substantial. Pearlman has an entertainment empire that has been reported to be worth $950 million. His company, Trans Continental Co., encompasses a recording studio, business management, publishing, Web sites, restaurants, an airline and even security guards.

Most recently, Pearlman was the force behind ``Making the Band,″ a documentary-style network TV show that follows the lives of eight young men competing for a spot in the new boy band O-Town. The show begins airing March 24 on ABC.

His groups refer to him as ``Big Poppa,″ and Pearlman said he remains friendly with the members of Backstreet Boys and NSYNC, despite the stinging accusations against him in their court papers.

``It wasn’t the guys saying that, it was the lawyers writing that,″ Pearlman said. ``How can they be upset if I made them multimillionaires?″

NSYNC’s JC Chasez said in court papers last year that Pearlman was ``an unscrupulous, greedy and sophisticated businessman.″

``It is the story of a man _ Lou Pearlman _ who, while hugging us and calling us ‘family,’ was picking our pockets, robbing us of our future and even endangering our health,″ Chasez wrote.

A spokeswoman for NSYNC said group members wouldn’t comment on their relationship with Pearlman. Neither would the Backstreet Boys.

Four of the five members of the Backstreet Boys _ Brian Littrell, Howard Dorough, A.J. McLean and Kevin Richardson _ sued Pearlman and his management team in 1997, claiming they had earned more than $10 million but had received less than $300,000.

When Pearlman launched the group in 1993, he set up a shareholders agreement that made him the ``sixth″ band member, deserving of one-sixth of the band’s revenue from merchandising and concerts. He encouraged the band to sign management and recording agreements with Trans Continental, giving his company 43 percent of the group’s revenue for consulting services. The band also gave power of attorney to Pearlman and Trans Continental.

Pearlman booked the band’s flights on the airline owned by his company and encouraged them to invest their savings in his company’s employee investment savings account, according to court documents.

The Backstreet Boys, who left Trans Continental in 1997, settled with Pearlman in 1998, but the legal battle isn’t over.

Donna Wright, whom Pearlman hired in 1993 to manage the band, has challenged the settlement, claiming she was improperly cut out of the deal.

In a separate lawsuit, Jeanne Tanzy Williams, a former talent agent who claims she helped assemble the Backstreet Boys, said she was wrongfully denied a portion of their earnings. She is suing Pearlman and the band.

Last year, Pearlman filed a $150 million breach of contract lawsuit against his other great success, NSYNC, after the group left Trans Continental and Bertelsman Music Group, which distributed their records. NSYNC signed on with Jive Records, current home to the Backstreet Boys and teen pop star Britney Spears.

Pearlman tried to make the group change its name, and to stop the release of their new album. NSYNC countersued for $25 million, charging that Pearlman cheated them.

They accused him of double-dipping by taking hefty management fees while controlling the company that received all income from the band’s live performances.

Under a settlement reached in December, the band will release its album ``No Strings Attached″ on March 21 while Pearlman and Trans Continental will continue to get a percentage of NSYNC’s future earnings.

The lawsuits haven’t stopped other young musicians, however, from trying to sign on with Pearlman. Take 19-year-old Jacob Underwood, who signed up to seek a part in the latest boy band creation, O-Town.

``We had a really good lawyer representing us,″ Underwood said. ``It’s a good contract.″

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