The Vinyl Media Pressing plant at 4201 N. Brighton Blvd. is seen on Thursday, May 2, 2024. (BusinessDen file)
The record retailer Vinyl Me, Please claims to have uncovered fresh evidence that a trio of fired executives went to great lengths to cover up their use of company funds to build a vinyl pressing plant in RiNo, including non-disclosure agreements and a codename for the project.
“We are keeping this project top secret internally,” former Chief Financial Officer Adam Block allegedly wrote in one email, urging stealth “so prying eyes don’t snoop around.”
The alleged NDAs, which would have prevented Vinyl Me, Please employees from discussing the clandestine project with VMP’s founders and board of directors, were drafted while the accused executives were reportedly spending $235,000 in company funds on equipment for the plant — which is not owned by VMP — and ignoring internal warnings it could fail.
“To date, the pressing plant has not demonstrated the ability to press vinyl records in a timely or professional manner,” Vinyl Me, Please claimed in an Aug. 30 court document.
Its latest allegations are contained in an amended lawsuit that VMP filed against Block, former CEO Cameron Schaefer and former Chief Strategy Officer Rich Kylberg. The company initially sued the trio in early May. Vinyl Me, Please was then countersued by them in June.
“My clients will be filing amended counterclaims on Sept. 13 that disprove what has been alleged,” Steve Csajaghy, an attorney for Schaefer and Block, said last week.
The company’s case centers around a decision by Schaefer, Block and Kylberg to expend VMP funds on a pricy vinyl pressing plant at 4201 N. Brighton Blvd. The trio have defended that decision in court and claim that VMP’s allegations of impropriety were manufactured by its board of directors to avoid paying them $300,000 in severance they are owed.
While it remains to be seen whether the Vinyl Media Pressing plant will be a success, emails and invoices supposedly uncovered by Vinyl Me, Please suggest its creation was kept a secret from all but one board member — the founder of another plant, who warned against it.
A Vinyl Me, Please staff meeting led by Cameron Schaefer, left, at the company’s offices on March 23, 2017. (Andy Cross/The Denver Post)
In June 2021, Block emailed a company lawyer to inquire about non-disclosure agreements.
“About to endeavor on some really big projects. I am leading one of them, which is presently top secret, and would like to work with you to draft an NDA for the handful of employees who will have to know about it,” he wrote, according to his former company’s lawsuit.
When told that VMP already required employees to sign agreements safeguarding confidential information, Block reportedly responded, “We want to have an additional layer of gravity, thus the desire to add the NDA. It’s more a reminder/deterrent than anything.”
The NDAs were supposedly sent to VMP’s finance director and others. They prohibited mention of the pressing plant to anyone but Schaefer, Block, Kylberg and a fourth executive. Not on the list of those who could know: VMP co-founders Matt Fiedler and Tyler Barstow.
That same month, Block reportedly arranged a call with Viryl Technologies, a Canadian firm that makes pressing machines. In emails, Block told Viryl that he “was hoping to be able to” pay Viryl a $195,000 deposit for two machines “without requiring (VMP) board approval.” It was then that Block warned Viryl about “prying eyes,” according to Vinyl Me, Please.
“We completely understand and respect the need to keep things top secret,” someone at Viryl emailed to Block in early July 2021, according to last month’s lawsuit. “We’ll follow your cues. If you have any specific requests (project codename, etc.), feel free to share.”
“The project is codenamed Project Willy Wonka,” the CFO is said to have responded.
The cache of new evidence that VMP claims to have come across also includes emails from Kylberg to Gary Salstrom, a vinyl industry veteran hired in 2021 to run the plant. In one, Kylberg refers to VMP as a “joint venture partner” in the plant that will “contribute startup capital.” That would have been news to VMP’s board, which was unaware of Project Willy Wonka.
Former Vinyl Me, Please CEO Cameron Schaefer (The Denver Post/Vinyl Me, Please)
Kylberg’s lawyers, who are with the Polsinelli firm, did not answer requests for comment.
Salstrom was hired by Schaefer, Block and Kylberg’s company, Vinyl Media Pressing, in 2021 but allegedly paid generously — his $156,000 salary also came with 12 months of rent reimbursements, lunch allowances and untallied “fun money” — by Vinyl Me, Please.
The one VMP board member who is said to have known about the plant well before it was narrowly approved in a November 2021 vote is Sarah Robertson, CEO of A to Z Media. That company, founded 30 years ago in New York, supplies records to VMP. She objected to Schaefer’s stated reason for starting the plant: to avoid pandemic-era supply shortages.
“To open a plant to solve a capacity weakness that VMP has is not a good idea,” she wrote in one email that Vinyl Me, Please is said to have obtained. She went on to warn that the plant “will not be able to compete on volume” and will need to find its niche. Robertson, who could not be reached for comment last week, ended her email with a prescient prediction.
“This is going to be an extremely expensive venture, and could become a liability.”
