Judge: Hard Rock Park's founders retain some rights

Hard Rock Park's old owners still have at least some rights to the park's overall theme, a federal bankruptcy judge in Delaware ruled Monday, but whether they will get the royalties they are asking for from the new owners is still uncertain.

FPI MB Entertainment, the park's new owner, said the ruling should not impact its planned Memorial Day opening. It also said Judge Kevin J. Carey left open the possibility of re-examining the ownership of the park's intellectual property at a later date.

``If anything, this provides us more of an opportunity to totally rebrand many areas in the park we felt needed to be more family friendly and represent everything we had to offer,'' Steve Baker, the president of Baker Leisure Group, which is managing the park, said in a statement.

Steven Goodwin, the former CEO of the park, which closed to bankrupcty in Septem ber, asked for an annual $500,000 licensing fee and 1.5 percent of gross revenues over $50 million from FPI MBE, saying a corpor ation he heads still held rights over the park's intellectual property.

FPI MBE asked the court to affirm all the park's intellectual property had been transferred to them when the company purchased the park for $25 million in February and also asked for protection from future litigation regarding the park's intellectual property rights.

It also asked for the court to affirm that Goodwin waived his rights by not objecting to the sale of the park in a timely fashion. Carey denied all the requests.

Carey read his opinion during an afternoon conference call, but the written order did not include his legal reasoning. The court declined to release the recording of the call late Monday.

In court filings, FPI MBE said the royalty request jeopardized not only the planned opening of the park by Memorial Day, but the attraction's entire exist ence.

Skip Scott, an attorney for FPI MBE, said Goodwin would probably not get paid as a result of the ruling. He said FPI MBE would change the names of some of the park's attractions to avoid infringing on any alleged intellectual property rights _ changes that had been planned anyway.

At best, FPI MBE maintained that Goodwin may have rights to the names of some of the rides. In the purchase agree ment, attorneys for Goodwin said the intellectual property license for some rides was explicitly excluded from being sold to FPI MBE.

``Many of the names for the rides and attractions and restaurants would have changed over time in any event, now it's a little bit more of a hurry-up fashion,'' Scott said.

``The park did not get rave reviews for its creative content previously, and there is a concerted effort to change that in any event.''

Joseph Gitto, an attorney for Goodwin, said he was pleased with the ruling. It would be up to the parties to work on an agreement regarding the park's intellectual property.

``Steven put a lot of work into this park as well,'' Gitto said.

``No one's looking to keep this park closed. It's just a matter of working together among the parties to get it opened.''

In court filings, Goodwin maintained that he transferred the park's intellectual property rights from HRP Myrtle Beach Operations, one of the corpor ations that filed for bankruptcy, to HRP Creative Services Co., a corporation that did not file for bankruptcy. Goodwin signed an agreement on behalf of both entities in 2006.

FPI MBE countered that since Goodwin signed the agree ment for both entities, it should be considered ``self-dealing'' and invalid. It also said that Goodwin did not seek the approval of the park's board of directors before signing the agreement.

Two of the park's original founders, Jon Binkowski and Felix Mussenden, are also partners in HRP Creative Services.

The previous owners leased the Hard Rock Park name from Hard Rock International last year for $2.5 million and are not claiming any rights to the actual name. The new owners are still discussing with Hard Rock International over whether the name can be kept for this year.

The park opened in April to much fanfare, but closed after a lackluster first season, failing to attract the 30,000 guests per day the old owners originally said would visit the park. The old owners said they employed 2,000 people at its height, and the new owners say they are hiring up to 1,000 people.

Contact MIKE CHERNEY at 444-1765.