Schon and Cain are litigating over company credit card files
Journey’s Jonathan Cain has responded to founder Neal Schon’s complaint for declaratory judgment and injunction. Cain’s lawyers have filed a motion to disqualify the lawsuit in which Schon has filed against Cain to obtain access to financial records regarding the group.
Both Schon and Cain are joint owners, members and managers of Nomota, LLC, which was established around 1998 as the operating entity for Journey. In the lawsuit, Schon states he “has the right to access and control Nomota’s books and records” and have “unfetted access to Nomota’s records so that he can oversee and manage Nomota/Journey.”
Schon also claims other underlying factors have forced the litigation.
On Tuesday (Nov 22nd), Cain’s representatives forwarded a response and motion to disqualify to The Music Universe in which Cain says he was “forced to publicly respond” to the meritless accusations.
“This is a matter that should have been resolved privately, but I am forced to publicly respond now to Neal’s malicious lies and personal attacks on my family and I in an effort to garner public support for his ill-conceived lawsuit — a lawsuit that has absolutely no merit,” Cain says. “Neal has always had access to the credit card statements; what he lacks — and what he is really seeking — is the ability to increase his spending limits. Since Neal decided to publicize what is going on, I can tell you we will present the evidence to the court that shows that Neal has been under tremendous financial pressure as a result of his excessive spending and extravagant lifestyle, which led to him running up enormous personal charges on the band’s credit card account. When efforts were made to limit his use of the card to legitimate band expenses, Neal unfortunately decided to attack me rather than trying to get his reckless spending under control. I am saddened by the situation — for Neal and for our fans — but since Neal filed a lawsuit, I suspect he will not be able to ignore the court like he has ignored the countless financial advisors and accountants he has fired over the past several years who have tried in vain to help him.”
Alan Gutman of Gutman Law, who is representing Cain in the matter, places no blame on Cain, but instead on Schon’s “reckless spending.”
“The evidence will establish that Schon’s financial crisis has nothing to do with his professed ‘unfettered access to Nomota’s records.’ Our investigation has established that Schon’s personal financial problems resulted solely from his reckless spending, including what preliminarily appears to be charging more than $1 million of improper personal expenses on the band’s corporate Nomota AMEX card. Schon’s complaint is the classic example of desperate people doing desperate things. It’s very unfortunate that Neal–and Neal alone–has created such difficulties for himself and his family through his profligate spending,” Gutman states.
The motion to disqualify that Gutman Law has filed on behalf of Cain claims “Miller Barondess previously represented Cain when it jointly represented Schon and Cain in the Valory case. We have the First Amended Complaint as well as the retainer agreement and conflict waiver letter to establish the prior representation.
“Where a substantial relationship exists between the prior representation and the current case it is presumed the attorney received confidential information and the attorney’s disqualification is ‘mandatory.’ Flatt v. Superior Court (1994) 9 Cal.4th 275, 283.”
Finally, “There is a substantial relationship between the prior and current cases because they both concern the ‘operating entities’ for band’s business activities. The new Complaint alleges Schon and Cain are 50-50 owners, managers and members of a limited liability company ‘through which Journey operates’ called Nomota, LLC, and even alleges, ‘Schon and Cain’s status as the sole members and managers of Nomota resulted from prior litigation in this Court, Neal Schon, et al. v. Ross Valory, et al., Case No C20-00407.’ [Schon’s Complaint, ¶ 15.]”
Schon refused our request for comment at this time, but did share a statement on Facebook.
“The only comment I’ll make at this time is it’s all very unfortunate and tried for over a year to attain all our corporate records for Nomota with many personal e-mails to Jon as well as many legal letter stating it’s my legal right to see all but I was left with no choice but to take it legal. There’s much more … since I filed I’ll be following my attorneys advice and not speak until we are in court where I’ll not have a problem at all. It is what it is,” he writes.
Schon and his wife Michaele share on Facebook that the bank has confirmed that Cain added his wife Paula to the bank account “behind Neal Schon’s back and violated his directive as The President and Founder of Journey, against Neal’s wishes and per the court agreement.” The post was later updated to state that “Jon Cain and Paula White want to kick out Neal Schön’s atty who won the right for Journey to carry on and Tour !! What is wrong with them ? Why do they want to harm Neal Schön & Journey? They work hard to harm and want to take the band down? Why? God please continue to protect Neal Schön who keeps Journey alive!”
A preliminary hearing is set for March 3rd. Cain has yet to respond to the suit. It’s unclear how the situation will affect the band’s upcoming 50th Anniversary Celebration Freedom Tour 2023.
This is the latest lawsuit that’s emblazoned the band. In September, Steve Perry filed a petition against his former Journey bandmates Neal Schon and Jonathan Cain over the use of 20 of the band’s songs as registered trademarks. Between February and May 2022, Schon and Cain were granted trademarks for some of the band’s biggest hits, like “Separate Ways,” “Open Arms” and “Anyway You Want It” for use on merchandising, such as hats, jackets, shirts, etc., without Perry’s consent.
Schon and Cain were the plaintiffs in a lawsuit against drummer Steve Smith and bassist Ross Valory in 2020 for attempting corporate coup d’état. Schon and Cain filed a lawsuit against their former bandmates, and accused them of sowing discord among the band members by engaging in self-dealing and selfishly putting their interests ahead of the band’s and sought $10 million for damages.