Hipgnosis Music v Merck Mercuriadis: High Court rules music publishing catalogues idea was not a corporate opportunity

The Business List of the Chancery Division has dismissed all claims brought by the liquidators of two failed music companies against Merck Mercuriadis, the founder of the Hipgnosis Songs Fund, ruling that a general investment insight into music publishing catalogues did not constitute a corporate opportunity capable of founding liability under the Companies Act 2006.

Mr Justice Adam Johnson delivered judgement on 23 June 2026 in Hipgnosis Music Limited v Merck Mercuriadis and Ors [2026] EWHC 1500 (Ch), rejecting claims for an account of profits against Mr Mercuriadis, Hipgnosis Songs Fund Limited (HSFL2) and Hipgnosis Song Management Limited (HSML), collectively running to several hundred million dollars.

Background

Mr Mercuriadis, whose career in artist management included Sir Elton John, Beyoncé and Guns N' Roses, was a director of Hipgnosis Music Limited (HML) and its subsidiary Hipgnosis Copyrights Plc between 2015 and 2018. Both were established with Swedish co-investors later convicted of pension fund fraud, to pursue acquisition of music publishing catalogues. That venture stalled in 2017 when the investors' backgrounds made any public fundraising effectively impossible, and both companies were wound up or dissolved.

In 2018, Mr Mercuriadis launched a new vehicle, HSFL2, which successfully raised approximately £202 million via an IPO and went on to acquire a substantial portfolio of music publishing catalogues. Blackstone later acquired a 51% interest in HSML, the associated advisory company, for approximately US$23.8 million. By 2024, HSFL2 was acquired by Blackstone/Lyra Bidco for approximately US$1.58 billion.

HML, acting through its liquidators and as assignee of Copyrights (restored to the register in 2022), claimed that Mr Mercuriadis had diverted what it described as Copyrights' "maturing business opportunity" in music publishing catalogues, and that HSFL2 and HSML had dishonestly assisted him in doing so.

The corporate opportunity finding

The central issue was whether the music publishing catalogues concept qualified as an "opportunity" under section 170(2)(a) of the Companies Act 2006, which extends the section 175 conflict of interest duty to former directors regarding opportunities of which they became aware during their directorship.

Adam Johnson J held that it did not. The concept had been conceived by Mr Mercuriadis before HML or Copyrights was incorporated, and applying the criteria articulated in Recovery Partners GP Ltd v Rukhadze [2025] UKSC 10, it had not come to his knowledge in the course of and by reason of his fiduciary role. Structural features described in the bond prospectus, including consultancy arrangements with Nile Rodgers and the royalty collection relationship with Kobalt, were part of his general fund of music industry knowledge, not proprietary corporate assets.

The court also rejected the Claimants' argument that section 1032(1) CA 2006 (the deeming effect of restoration to the register) treated Mr Mercuriadis as having remained a director of Copyrights throughout its dissolution, following the Supreme Court's analysis in Bilta UK Ltd v Tradition Financial Services Ltd.

Honesty and accessory liability

Mr Mercuriadis was not found to have acted dishonestly. The judge accepted his evidence that from around April 2017 he had honestly concluded that neither HML nor Copyrights had any viable future given their unavoidable association with the convicted fraudsters. That conclusion was materially reinforced by the Claimants' own expert evidence on the impracticability of any public fundraising connected to those investors.

The claims against HSFL2 and HSML were dismissed both for absence of any primary breach and for want of attribution of dishonesty to HSFL2, whose independent board of non-executive directors was found to have exercised genuine oversight of the fund's acquisitions.

Edward Davies KC and Anna Scharnetzky (instructed by Forsters LLP) for the Claimant. Edmund Cullen KC and Edward Granger (instructed by Payne Hicks Beach LLP) for the First Defendant. Neil Kitchener KC, Patrick Harty and Dominic Li (instructed by Herbert Smith Freehills Kramer LLP) for the Second and Third Defendants.