A circuit court judge in Chicago granted preliminary approval Wednesday to an unprecedented settlement that may resolve 20 class-action fraud lawsuits filed against Milli Vanilli's record company.
The settlement was approved by Cook County Circuit Judge Thomas O'Brien, who rejected an Aug. 12 proposal by Arista Records and its parent company, Bertelsmann Music Group, because it required consumers to buy more products to get a refund.
Under the terms of the new agreement, Arista and BMG have agreed to pay $1 for singles, $2 for albums and cassettes and $3 for compact discs to any disgruntled Milli Vanilli fan who can prove they purchased recordings by the photogenic duo before Nov. 27, 1990.
Fans who bought tickets for Milli Vanilli concerts will be able to send in a ticket stub to receive a rebate of 5% of the ticket's cost, not in excess of $2.50.
Consumers who purchased Milli Vanilli merchandise may add their names to a list of contributors to three court-approved charities to which Arista and BMG have pledged to donate $250,000.
If every fan filed, the settlement could cost as much as $25 million. But marketing experts hired by BMG put the refund rate at about 5% to 15% of the group's estimated 10 million fans.
The Chicago suit was filed last November after Milli Vanilli front men Robert Pilatus and Fabrice Morvan disclosed that they did not sing a note on their 10-million-selling album "Girl You Know It's True."