Tuesday, November 24, 1998

McLachlan in debt for many years

VANCOUVER (CP) - Singer Sarah McLachlan was in debt for several years before her songs finally made money, she testified yesterday in B.C. Supreme Court.

The singer told the court her 1988 debut album Touch put her $400,000 in debt to her record company - a situation that didn't change until 1994.

The civil trial is trying to sort out a dispute over record royalties.

"It took six of seven years before I broke even and started generating revenue,' McLachlan told B.C. Supreme Court Justice Bruce Cohen.

She said the cost of doing promotional touring, recording and making videos put her $400,000 in debt by 1994, when her album Fumbling Towards Ecstacy was released and became an international hit. That prompted her fans to start buying her previous records.

Album sold `marginally'

"Up until then, it sold extremely marginally," McLachlan said of Touch, which has sold more than 625,000 copies.

It was the third day on the witness stand for McLachlan, 30, who is being sued by Darryl Neudorf, a former drummer and songwriter with the band 54-40. He now is a record producer.

He claims he co-wrote four songs - Vox, Steaming, Strange World and Sad Clown - on McLachlan's debut album. He also claims he co-produced Touch with Greg Reely.

Neudorf, 34, is seeking damages for unpaid royalties, claiming McLachlan and her Vancouver record company, Nettwerk, her manager Terry McBride and business partners Mark Jowett and Ric Arboit have been unjustly enriched by Neudorf's work.

At issue is several months in early 1988 when Neudorf was hired to help McLachlan develop songs after she was signed to a five-record deal on Oct. 2, 1987.

McLachlan testified her record contract gave her 12 points - 12 per cent of retail sales - but she was supposed to pay for the royalties for Reely, Neudorf and Phillips out of her share.

She said Nettwerk generously offered to split the cost of Reely and Neudorf, which left her with 10.5 percentage points of each album sold.

Neudorf upset

She recalled Neudorf telling her, while they were working on the pre-production of McLachlan's 1991 album Solace, that he was upset and frustrated about the compensation he got.

Earlier Monday, Neudorf's lawyer, Jonathan Simkin, argued that an expert report by musician Bill Henderson, who has been retained by Nettwerk, is biased and should be thrown out because Henderson's daughter Camille works as a backup singer for McLachlan. The judge will rule later in the week.