Rebate Decision Expected

A circuit judge in Chicago is expected to grant preliminary approval today to an unprecedented settlement to resolve a class-action fraud lawsuit filed against Milli Vanilli’s record company.

If approved, the settlement could take effect as early as September and potentially cost Arista Records and its parent company, Bertelsmann Music Group, millions of dollars--$225,000 of which the company has pledged to donate to court-approved charities. It could also lead to the resolution of more than 20 similar pending suits, including two in Los Angeles. Two similar class-action claims were denied certification by a federal judge in Philadelphia on June 7.

Under the terms of the proposed settlement, Arista and BMG would offer $2 to $3 rebates on future purchases to any disgruntled fan who submits a bar-code identification tag clipped from any Milli Vanilli compact disc, tape or record.

When the Milli Vanilli lip-sync scandal broke, Pilatus and Morvan alleged that officials at New York-based Arista, parent company Bertelsmann Music Group (BMG) and Gallin Morey Associates talent agency purposely misrepresented the pop act to the public.