GNR members and legalities throughout the years

[Liva]

I posted this in the Izzy topic of why he didn't join the reunion, but as the post was made it came to a life of its own.  I felt it might be more fitting as its own topic, and am open to see how right, or wrong, my conclusions were on how the events went down from 1984 - 1998

 

Based on publicly available information.

December 1984 - Guns N' Roses files a general partnership agreement containing (Axl, Slash, Duff, Izzy, Steven) as members of the partnership

August 25, 1986 - The GNR Partnership signs a recording agreement with Geffen which was amended at some point to separate AFD and Lies (Old Records) and UYI 1 and UYI 2 (Illusions LP's)

March 28, 1990 - The Partners of the GNR General Partnership entered into an agreement transforming Adler from a member of the partnership to an employee of the Partnership (Izzy was still a member, and I presume a vote took place, majority ruled Adler's fate? 4 to 1?).  

July 19, 1991 - Adler filed a lawsuit against GNR Partnership making allegations mainly that he was forced to sign document giving up his partnership interest, he was strung out when he signed and no lawyer was present on his behalf when he signed.

September 24, 1993 - Adler settled out of court on with GNR Partnership paying Adler $2.3 Million, $150,000 from Alan Niven and $50,000 from Doug Goldstein.  Parts of the court case with Axl testifying can be found on YouTube.  

Back to 1991

September 9, 1991 - Izzy resigns from the partnership just 8 days before Use Your Illusions albums are released.  I believe he was scared of litigation or upcoming litigation surrounding the riots in St. Louis among other reasons/sobriety/not wanting to tour stadiums etc.

September 10, 1991 - A new or amended General Partnership agreement is established, from this date on, profit splits were not equal.  Management decisions were made by Axl and Slash, if they could not agree, Duff would be the tie breaker.

    - The current partners (Axl/Slash/Duff) divided Net Merchandise Profits, all net NEW record profits (Illusions LP's, Spaghetti, Live Era) and Net      Touring Profits by this split:  36 1/3% to Axl: 33 1/3% to Slash: 30 1/3% to Duff.  

    - The document states "Such division will commence with the date hereof with respect to Net New Record Profits and shall commence with November 1, 1992 with respect to Net Merchandise Profits, Net Touring Profits, and Net Miscellaneous Profits."  This document was signed on November 15, 1992 by Slash...November 21, 1992 by Duff.  Axl signed it, but is not dated next to his name.   The agreement although signed in November 1992 states the "effective date" as September 10, 1991.  Its almost an agreement that was made and kinda back dated.  

    - The agreement also stipulates Old Record Profits are to be split 20% each member (Axl/Slash/Duff/Izzy/Adler)

    - Lastly the agreement states that if any member leaves they would be considered a "Terminated Member" only Axl/Slash/Duff are left as members at this point, and no matter what scenario happens, Axl has the right to use the Group Name "Guns N Roses" exclusively in the future.  GNR were on a 6 week break from the tour when this agreement was signed by Slash and Duff.  10/6/92 - Seattle, WA with next show 11/25/92 in Venezuela.  So the need to sign this otherwise Axl won't go on stage is a stretch, because it wasn't a show night or week.  Now I am sure if they didn't sign, the rest of the tour would've been cancelled, so that myth is a stretched truth in reality, not false but not as dire as Slash/Duff made it seem.   I always thought it was they signed it the day of a show/day before a show to prevent a riot.  If GNR didn't show up to Venezuela a riot probably would've ensued, but who knows

August 31, 1995 - Axl sent written notice to Slash and Duff informing them he was going to withdraw from the partnership effective December 30, 1995 and was going to form a new group using the name "Guns N' Roses"

December 31, 1995 - Slash and Duff are the only remaining members of Original GNR partnership.  Axl left the partnership, created a new one and took GNR name with him and did not include Slash or Duff in his new band.  At this point, Slash and Duff legally were not able to perform under the name Guns N' Roses even though Slash/Duff still remain the only members of Original GNR and own and control all Original GNR partnership assets.  

Oct 31, 1996 - Axl sends his infamous fax to MTV stating Slash will not be musically involved in any new GNR endeavor and has for the most part not been since April 1994 other than a 2 week period with Zakk Wylde in late fall of 1995.  Axl goes on to state "Slash has been "OFFICIALLY and LEGALLY" outside of the Guns N' Roses Partnership since December 31, 1995."  From the documents I am looking at, Axl actually left GNR, not Slash and Duff like has been said.  I guess Duff and Matt were employees of Axl's new GNR in 1996-1997 until they quit as they admitted to.  

So why all this?  Well lots of things went down, Izzy voluntarily walked away, I would assume he still gets and has always gotten his publishing and songwriting royalties from UYI, but he might have given that up with the resignation?  I am not sure.  Risk/Reward...Izzy didn't want the litigation risk and Axl risks, and he left, therefore should not be rewarded on an equal/semi equal basis that Slash and Duff are because they toured for 3 years, made the now famous music videos, put in the effort to brand the GNR name for years after Izzy left.  Not only that, Slash has kept the GNR name in the limelight with Guitar Hero, his non stop touring of his solo projects, and all his media appearances over the last 25+ years.  Axl kept the name going as well with his touring.  Izzy wrote GREAT songs/contributions, but he let Slash and Duff do the heavy lifting from Sept 1991 till present.  I would hope they offered Izzy a nice payday for the reunion, but in reality, the reunion is Axl and Slash, the casual fan doesn't know Duff/Izzy/insert drummer name here...lets be honest.  If I were Slash that went thru what he did all those years, plus getting hammered in the press for the GNR breakup, and having to answer non stop questions about it, while Izzy was in isolation for 20+ years dodging all the flack, I would probably not want to "split the loot" evenly either at that point.

 

For a deeper dive:

https://web.archive.org/web/20040727133641/http://celebrityjustice.warnerbros.com/documents/04/05/gnr.pdf

https://www.a-4-d.com/t3745-1992-10-dd-guns-n-roses-partnership-contract-memorandum-of-agreement

https://ultimateclassicrock.com/slash-quits-guns-n-roses/

http://gnrontour.com/

[Blackstar]

So I guess I'll post my response in this thread , too:

---

A couple of points:

- Following Izzy's departure, It took a year for the new partnership agreement to be drawn up because there were still negotiations with Izzy on the terms and conditions of his quitting the partnership (in an interview in July 1992, Slash mentioned a meeting he had with Izzy  a few days prior to sort out business stuff). For the same reason, the renegotiated recording agreement with Geffen was also signed in 1992, although it was about the Illusions and future releases (the partnership agreement and the recording agreement went together).

- The partnership agreement (or at least the version of it that has been publicly available) was signed by Slash and Duff on the dates you mentioned, however the clause about the band name (which was initialed by the three partners) might have been added on a later date.

- Axl's resignation from the GN'R partnership (according to the resignation notice he sent on Aug. 31, 1995) would have been effective on 12/31/1995. However, according to Slash's book (and, to an extent, to Axl's chats), after negotiations there was a "trial"/transitional period. So it doesn't seem that Axl's new entity became effective right away. Slash quit the band during that "trial" period, so he never joined the new entity (it's unclear if that was the case with Duff as well, but I reckon it was - as for Matt, he was an employee anyway). It's also not clear whether Slash and Duff would have been employees or partners (although with lesser rights than before) had they joined Axl's new entity (Axl said that he started a new "partnership).

And, as far as the record label was concerned, Slash and Duff stopped being part of GN'R in May 1998, when the new recording agreement was signed. Black Frog (Axl's entity) was also founded in that year (1998), so that's most likely when "NuGnR" started as a business entity.

Edited January 3, 2023 by Blackstar

[Liva]

@Blackstar I think we are pretty much on the same page.

1.  The agreement was signed in November 1992 which makes sense given the timeline with Izzy, even though the agreement says "effective date" Sept 1991.  Probably whatever splits and agreements they made and monies were shuffled back to Sept 1991.

2.  I wouldn't think something like that would be made after the fact and initialed on only.  Its a 9 page agreement, they would have just rewritten the agreement and had fresh copies signed.  It doesn't look just added either (https://imgbox.com/MRCxCgki) it looks to fit and flow with the document.  They were one of, if not, the biggest band in the world that already had lots of litigation with Steven and other incidents, legal documents involved lawyers and were crafted with lawyers heavily involved.  If this were a 1984-1986 document, money was tight, they weren't world renowned rockstars, I could see it being added on the fly.  I am a HUGE Slash fan as I play guitar, but am also a huge Axl fan. I call it as I see it on this one, Slash and Duff exaggerated the duress.

3.  Axl always maintained he was the last man standing and was left to keep the GNR banner and name going, everyone quit.  Just as I called Slash out above, I call Axl out on this, he is the one that quit the Original GNR Partnership that has been in effect in various forms since 1984.  So Slash and Duff were left as members of an entity that couldn't use the GNR name to perform or release, kinda left out there in a rudderless boat.  Axl is the one that actually quit, he legally left the partnership even though in the Fax he sent MTV he says otherwise and still maintains otherwise.  Now Axl's new partnership or whatever he created was something Axl would have to allow Slash/Duff to join or maybe make them employees which Slash clearly did not seem interested in.  The quit during the late fall 1995 trial period, but as Axl gave his 120 day resignation notice on Aug 31, 1995....it was pretty much a foregone conclusion that Axl was going off to do his own thing on Dec 31 1995 anyway, maybe his plan was to hire both Slash and Zakk as employees, and Slash wasn't having that?

I wonder if Slash and Duff prevailed in that 2004 lawsuit about Axl blocking all the licensing opportunities.  From their arguments and what I can find, Axl actually didn't have a right to veto license opportunities, unless he could stop it via mechanical/sync royalties?  Maybe movie studios wanted all 3 to sign off to protect themselves from Axl one day dropping a lawsuit on them and causing years of litigation, he sure had that reputation.  I could see movie studios passing on a song if it were going to cause crazy headaches, kinda like how Axl sued Guitar Hero 3 for $20 Million 3 years after the game was released cause Slash was on it.

[denin]

12 minutes ago, Liva said:

So Slash and Duff were left as members of an entity that couldn't use the GNR name to perform or release, kinda left out there in a rudderless boat.  Axl is the one that actually quit, he legally left the partnership even though in the Fax he sent MTV he says otherwise and still maintains otherwise.

That's a good point. Axl did indeed quit the band (partnership) and said he did it to protect the band. One can claim that he acted in bad faith, but S&D should've raised that issue up in late '95. Slash mentioned in his autobiography that he "really didn't know what to do" when Axl sent him that letter. Have a real lawyer look into it, maybe? Same goes to the band members agreements drawn up in Fall '96. In retrospect, S&D seemed to have been caught off-guard by Guns turning into a corporation and offering them employment.

Axl was not too interested in Zakk Wylde. He was more about the '96 version of Aerosmith Rocks, with Slash playing lead guitar. Just that soon after, he heard the DJ Shadow album...

[Liva]

18 minutes ago, denin said:

That's a good point. Axl did indeed quit the band (partnership) and said he did it to protect the band. One can claim that he acted in bad faith, but S&D should've raised that issue up in late '95. Slash mentioned in his autobiography that he "really didn't know what to do" when Axl sent him that letter. Have a real lawyer look into it, maybe? Same goes to the band members agreements drawn up in Fall '96. In retrospect, S&D seemed to have been caught off-guard by Guns turning into a corporation and offering them employment.

Axl was not too interested in Zakk Wylde. He was more about the '96 version of Aerosmith Rocks, with Slash playing lead guitar. Just that soon after, he heard the DJ Shadow album...

Slash/Duff really couldn't do anything in late 95.  The General Partnership agreement says anyone can leave with 120 days notice, which is exactly what Axl did.  A lawyer isn't going to force Axl to stay.  I read Slash's book when it came out, I haven't read it since, but given everything that happened up until that point, with St Lous riot, Montreal Riot, the various lawsuits Axl was in.  Axl wanting to bring a monster lead guitarist in (Zakk Wylde) to play with Slash, they dont complement each other at all.  Axl rejecting Slash's material and him making the Snakepit album by himself, Axl being difficult or a recluse, if I were in Slash's shoes and got that letter in August, I wouldn't know what to do either.  Add hard drugs and alcohol into the mix, and now you really dont know what to do.  I think Slash tried to appease Axl by doing that 2 week session with Zakk.  As for the band members agreements drawn up in 1996, from Axl's MTV fax, it would appear that Slash wasn't going to be offered an employment agreement.  Not sure what Matt and Duff did, but if Slash is gone and Axl starts a new corporation which is is majority or 100% owner, and has 100% ownership of the name, and is the "voice' and frontman of the band.  Its not like at that point, Duff could really demand much of anything of a company he owns 0% of.  Was probably a reasonably generous take it or leave it type of deal, which him and Matt took, until they couldn't take it anymore.  Kind of an interesting revelation of the inner workings of the band.  I wonder if Axl rejoined the original partnership or if they created a new one for the reunion?

[Blackstar]

1 hour ago, Liva said:

2.  I wouldn't think something like that would be made after the fact and initialed on only.  Its a 9 page agreement, they would have just rewritten the agreement and had fresh copies signed.  It doesn't look just added either (https://imgbox.com/MRCxCgki) it looks to fit and flow with the document.  They were one of, if not, the biggest band in the world that already had lots of litigation with Steven and other incidents, legal documents involved lawyers and were crafted with lawyers heavily involved.  If this were a 1984-1986 document, money was tight, they weren't world renowned rockstars, I could see it being added on the fly.  I am a HUGE Slash fan as I play guitar, but am also a huge Axl fan. I call it as I see it on this one, Slash and Duff exaggerated the duress.

The problem is that the contract document that made the public domain (the one in the link), and in which the name clause was added as an asterisk (so it does look that it could have been added at a later time), seems to be just one of a few copies of it - if I'm not mistaken, this particular document was attached to the 2004 Slash/Duff lawsuit as one of the exhibits, so it probably was a draft copy Slash or Duff  had in their possession. I suppose there was a more official written up version in which the name clause was incorporated in the main text.

1 hour ago, Liva said:

3.  Axl always maintained he was the last man standing and was left to keep the GNR banner and name going, everyone quit.  Just as I called Slash out above, I call Axl out on this, he is the one that quit the Original GNR Partnership that has been in effect in various forms since 1984.  So Slash and Duff were left as members of an entity that couldn't use the GNR name to perform or release, kinda left out there in a rudderless boat.  Axl is the one that actually quit, he legally left the partnership even though in the Fax he sent MTV he says otherwise and still maintains otherwise.  Now Axl's new partnership or whatever he created was something Axl would have to allow Slash/Duff to join or maybe make them employees which Slash clearly did not seem interested in.  The quit during the late fall 1995 trial period, but as Axl gave his 120 day resignation notice on Aug 31, 1995....it was pretty much a foregone conclusion that Axl was going off to do his own thing on Dec 31 1995 anyway, maybe his plan was to hire both Slash and Zakk as employees, and Slash wasn't having that?

I guess in Axl's mind, his reasoning or excuse, if you will, was that his resignation from the partnership was just an "amendment" of the legal/business status of the GN'R band, which continued to exist, so Slash and Duff would "just" have to join the new partnership in order to continue to be in the band. So, for him, the fact that Slash didn't join the new partnership meant that he (Slash) left the GN'R partnership on Dec. 31, 1995 - although, like I said, Slash (and probably Duff as well) remained in band until they quit under a "transitional" status where they were still part of the old partnership and didn't join the new partnership. Also like I said, I don't think Axl would have made them employees - as for Zakk Wylde, the deal was over by Aug. 1995.

1 hour ago, Liva said:

I wonder if Slash and Duff prevailed in that 2004 lawsuit about Axl blocking all the licensing opportunities.  From their arguments and what I can find, Axl actually didn't have a right to veto license opportunities, unless he could stop it via mechanical/sync royalties?  Maybe movie studios wanted all 3 to sign off to protect themselves from Axl one day dropping a lawsuit on them and causing years of litigation, he sure had that reputation.  I could see movie studios passing on a song if it were going to cause crazy headaches, kinda like how Axl sued Guitar Hero 3 for $20 Million 3 years after the game was released cause Slash was on it.

The 2004 lawsuit was dismissed "without prejudice", which means that the parties (Axl had counter-sued) could file it again in the future if they were so inclined. That was most likely the result of both parties mutually withdrawing their lawsuits, I guess because they both wanted to avoid a jury trial and weren't able to reach a settlement. So neither party won in that lawsuit - and, as far as we know, nothing changed after that as still all three of them needed to sign off for songs to be used, and they also blocked each other's video releases.

The 1992 partnership owned certain companies/corporations (in which the three partners were shareholders) and assets. After Slash and Duff left, the companies for touring etc. were dissolved/liquidated, except one: Guns N' Roses Music, Inc. (the publishing company that controlled the rights to the back catalogue) remained active, and the partnership remained active through it, as all three partners were still shareholders.

In their 2004 lawsuit against Axl, Slash and Duff claimed that Axl had no voting or veto rights, since he had resigned from the partnership (the lawsuit was basically because they wanted to license songs to be used in movies and Axl vetoed them). From the little we know about the content of Axl's response and counter-suit (unfortunately we don't have the documents), Axl claimed that he still had rights to the old partnership despite his resignation letter.

 

[Liva]

27 minutes ago, Blackstar said:

The problem is that the contract document that made the public domain (the one in the link), and in which the name clause was added as an asterisk (so it does look that it could have been added at a later time), seems to be just one of a few copies of it - if I'm not mistaken, this particular document was attached to the 2004 Slash/Duff lawsuit as one of the exhibits, so it probably was a draft copy Slash or Duff  had in their possession. I suppose there was a more official written up version in which the name clause was incorporated in the main text.

I guess in Axl's mind, his reasoning or excuse, if you will, was that his resignation from the partnership was just an "amendment" of the legal/business status of the GN'R band, which continued to exist, so Slash and Duff would "just" have to join the new partnership in order to continue to be in the band. So, for him, the fact that Slash didn't join the new partnership meant that he (Slash) left the GN'R partnership on Dec. 31, 1995 - although, like I said, Slash (and probably Duff as well) remained in band until they quit under a "transitional" status where they were still part of the old partnership and didn't join the new partnership. Also like I said, I don't think Axl would have made them employees - as for Zakk Wylde, the deal was over by Aug. 1995.

The 2004 lawsuit was dismissed "without prejudice", which means that the parties (Axl had counter-sued) could file it again in the future if they were so inclined. That was most likely the result of both parties mutually withdrawing their lawsuits, I guess because they both wanted to avoid a jury trial and weren't able to reach a settlement. So neither party won in that lawsuit - and, as far as we know, nothing changed after that as still all three of them needed to sign off for songs to be used, and they also blocked each other's video releases.

The 1992 partnership owned certain companies/corporations (in which the three partners were shareholders) and assets. After Slash and Duff left, the companies for touring etc. were dissolved/liquidated, except one: Guns N' Roses Music, Inc. (the publishing company that controlled the rights to the back catalogue) remained active, and the partnership remained active through it, as all three partners were still shareholders.

In their 2004 lawsuit against Axl, Slash and Duff claimed that Axl had no voting or veto rights, since he had resigned from the partnership (the lawsuit was basically because they wanted to license songs to be used in movies and Axl vetoed them). From the little we know about the content of Axl's response and counter-suit (unfortunately we don't have the documents), Axl claimed that he still had rights to the old partnership despite his resignation letter.

 

crazy how much legal finagling goes on behind the scenes in a rock band

[SoulMonster]

8 hours ago, Liva said:

crazy how much legal finagling goes on behind the scenes in a rock band

Whenever there is a lot of money involved, regardless of context, there will be lots of financial wranglings.