Wednesday, January 24, 2007

Evansville's Integra Bank Burned By Boy Band Mogul

Lou Pearlman is best known as the quirky, oversized man who started up several successful boy band groups, including Backstreet Boys and 'N Sync. He's apparently fallen on some tough times, and that has put Evansville's Integra Bank at risk for $17.7 million in delinquent loans Pearlman has with the bank. I found it odd that an Evansville bank would be loaning money to the Florida businessman. As the Evansville Courier-Press explains:

Mike Vea, chairman, president and CEO of Integra, said no one currently at the bank was involved in the loans. He said the bank has since discontinued this type of lending, which was done through brokers to out-of-area borrowers, and that these were the last of such loans on the bank's books.

I recall one of those "Behind the Music" pieces on VH-1 which explained Pearlman's relationship with his former boy band clients. Band members of both Backstreet Boys and 'N Sync terminated their contracts with Pearlman after they hit it big. Essentially, Pearlman would go out and recruit guys like Justin Timberlake to join these start-up bands before they had a career in music. As I recall it being explained, he paid them a small stipend and provided them a clothing allowance, and he financed all the costs of the band. He found music for them to record and he owned their trademark and the song royalties. Once the bands became successful, the members didn't like the bargain they had struck with Pearlman. As I recall, in the settlement with one of the bands, Pearlman wound up continuing to own a one-sixth interest with the other five band members, even though he had no further financial or management ties with the band.


Anonymous said...

I saw that show, maybe it was another news magazine. Funny how these millionaires end up blowing all their money. Since boy bands have pretty much died out, it sucks to be someone in that business. From what I recall, he paid the members well enough (more than most folks will ever make), but his cut was very large compared to other contracts. When the contract was up, he refused to back down. He always said that he was the one who invested all the up front money and he felt that split was fair.

Anonymous said...

it sucks!