An Australian music company with a director who has a criminal history has managed to avoid closure, at least for the time being. An article by News.com.au revealed that Blue Pie Records, a music company based in NSW with offices in Australia and the US, faced allegations from musicians who claimed their music was used without consent.

Blue Pie Records refuted the claims, stating that errors were made in some instances while asserting their ownership of the music in others. An offshoot of the company, known as Blue Zebra Digital and operating as Blue Pie Records, Blue Pie Productions, Planet Blue Pictures, and Ordior, faced legal action in the Federal Court for owing over $200,000 in taxes.

The company’s only director, Damien Reilly, stated in a previous interview with news.com.au that he intends to repay the Australian Taxation Office in full. He is currently working on arranging a payment schedule and has also enlisted the help of legal professionals to contest the matter. According to Mr. Reilly, the company’s debt has not affected any staff, and all superannuation payments are current.

“Importantly, the ATO is the sole creditor, as all other creditors have been paid out in full,” he said.

The Federal Court postponed the Blue Zebra Digital winding up application case for a second time, now scheduled for April 12. The government is facing embarrassment after it was revealed that Blue Pie Records has received taxpayer-funded grants despite having a tax deficit.

An agency in charge of distributing a significant amount of grant money has revealed it is a creditor in the liquidation process. During a recent court case involving Blue Zebra Digital, a representative from Regional NSW revealed their status as a creditor in the case.

The solicitor, representing the crown in the right of the state of NSW, acting through Regional NSW, mentioned difficulties in obtaining court documents about Blue Zebra Digital. Registrar Tim Luxton has mandated that access to these documents be granted. News.com.au reported that Blue Zebra Digital had been granted $300,000 from Regional NSW in 2021 through the Regional Job Creation Fund.

In contrast, that amount exceeds its current tax debt. A recent discovery about the decision-making process behind awarding Blue Zebra Digital the grant further compounds the government’s embarrassment.

According to reports, attorneys representing the Bon Scott estate expressed worries about the grant to Regional NSW, following claims by Blue Pie Records asserting ownership of all of Bon Scott’s music. However, shortly after, Blue Pie received the grant, despite Regional NSW being informed of the accusations.

On the Blue Pie Records website, the company claimed in 2021 “Bon Scott is an exclusive Head Office Records & Blue Pie Records USA artist. Bon Scott is published by Blue Pie Publishing USA and Blue Pie Records”.

But Sonic Rights Management, the company overseeing the Bon Scott estate, strongly refuted this allegation.

“Blue Pie has never had any relationship, association or affiliation with either Bon Scott personally or his Estate,” Sonic Rights said in a statement to news.com.au.

Blue Pie Records acknowledged that the exclusive rights claim was a mistake, attributing it to ongoing updates on their website. The issue has been rectified. In March 2021, Sonic Rights discovered that Blue Pie was seeking a grant and informed Regional NSW that the company was falsely claiming to represent Bon Scott.

Regional NSW confirmed to news.com.au that they chose to grant Blue Pie Records $300,000 in taxpayer funds in December of that year, following the complaint made months earlier. Blue Pie Records is currently under consideration for funding from the Export Market Development Grants Programme by the Australian Trade and Investment Commission (Austrade). Mr. Reilly mentioned that they had already secured this grant successfully.

“We appreciate the support provided by government initiatives, which enables us to further contribute to the growth and success of our export endeavours and creating jobs for Australians in the media and arts sector,” he said.

A prior investigation by news.com.au revealed the complicated past of the Blue Pie Records group of businesses and its director. The investigation found that several companies under the director’s leadership have collapsed, and it was also uncovered that Mr. Reilly had a previous jail sentence decades ago.

In 1990, Mr. Reilly was convicted of fraudulent misappropriation of money in NSW. He received a jail term of two years and eight months. According to ASIC records, three companies managed by Mr. Reilly have gone into administration or liquidation over the last ten years, with outstanding debts to the tax department in two instances. According to Mr. Reilly, this was a result of the global financial crisis.

“We barely survived it, like most of Australia,” he said. “Those businesses were never able to recover, a couple of others did.”

In 2014, a petition was filed to bankrupt Mr. Reilly, but it was later dismissed, as per the National Personal Insolvency Index. Blue Pie Records operates several entities, such as Blue Pie Records USA LLC, Blue Pie Productions USA LLC, Blue Zebra Digital, Blue Vault Digital, Blue Pie Meta Data Services, Meta Data Content Services, and Ordior Meta Services.

Several musicians have alleged that Blue Pie Records used their work without authorisation, a claim that the company has refuted. News.com.au interviewed two artists who felt they had lost potential record deals because they alleged that Blue Pie Records had released their music without approval.

When attempting to secure an exclusive agreement with a record label, they were unable to do so due to their music being widely available on the internet. Ann-Marita Garsed, a Norwegian musician residing in the US, expressed that the record label was disappointed to discover her music was already available on Blue Pie’s website and other distribution platforms. They quickly withdrew from the agreement. Ms. Garsed sent Blue Pie Records a CD with one song for a charity compilation, but all the songs from the CD were uploaded online, and it took over ten years to have them removed.

“It’s like you’re stuck with it (Blue Pie) for life. It left a bad taste in my mouth and a lot of distrust,” Ms Garsed told news.com.au. “I’m terrified that this is going to happen again.”

Similarly, American musician Frank Rogala shared that he was close to finalising a $7000 record deal when he discovered his music was being distributed by Blue Pie Records after searching online. He had to withdraw from the record deal as a consequence. Blue Pie Records stated that they have removed the music and issued an apology to Ms. Garsed. They also clarified that they did not have any direct contact with Mr. Rogala.

According to two other musicians, they submitted demo tapes to Blue Pie Records. This was meant to give a preview of their music but ended up being included in the Blue Pie Records catalogue.

“I had to change my name,” Alex Martin told news.com.au from North England.

“They were demos, they weren’t finished.”

Another artist, Phil Munro, alleges he had a comparable encounter in the early 2000s when he was requested to submit some remixes to the Australian music company.

“Later on I found that Blue Pie had released those without my permission,” he told news.com.au.

“Anyone who listened to it would think ‘they sound like sh*t’. They weren’t meant to be for release. It’s pretty poor form.”

Blue Pie stated that it was not aware of the artists’ dissatisfaction and advised them to contact the company.

Editors Publicspectrum

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