Feldstein was the co-founder and CEO of Career Artist Management (CAM), from which he principally managed both Maroon 5 and Adam Levine – his childhood friend.
In 2016, entertainment company Roc Nation purchased a 49% ownership interest in CAM. According to court documents, Feldstein and Roc agreed in the purchase contract to obtain insurance protecting Roc Nation’s investment should Feldstein die or become disabled.
Roc Nation had purchased the “key man insurance policy” from HCC in 2016, and renewed the policy on December 21, 2017.
However, Feldstein suddenly died from a pulmonary embolism the very next day, December 22, 2017 – his cause of death was declared natural by the Los Angeles Medical Examiner. HCC denied paying out Roc Nation’s claim, and the company responded by filing a lawsuit against the insurer in US District Court Southern District of New York on Jan. 18, 2019, claiming that its insurance was wrongfully denied.
HCC had argued that Roc Nation Roc Nation was precluded from any recovery, since the company failed to cooperate with the insurer’s investigation of the claim – something Roc Nation denied. The insurer also claimed that the policy language required that the payout be reduced based on all future profits generated traceable to Feldstein’s services.
Roc Nation contended that the policy’s language stated that it was entitled to recoup its full investment in CAM, minus any dividends it had received from CAM when Feldstein passed away.
Both sides also argued over specific language in the policy, such as the definition of “and/or,” and writing “insured” instead of “insured person.”
Billboard reported that last week, Judge Paul Engelmayer sided with Roc Nation, finding that the company had “complied with the overwhelming majority of HCC’s requests, and offered reasonable justifications when it failed to do so.” The judge also found that the entertainment company submitted a lot of information in response to HCC’s “unreasonably broad” requests, and that the term “generated” was not a “forward looking” meaning, but instead plainly referred to revenue that was generated.
Engelmayer ordered HCC to pay Roc Nation a US$12,529,222 policy amount, less any profit generated by Feldstein while he was alive and performing services through December 22, 2017.