Madonna's Maverick Takes on Warner

03/26/2004 AT 01:24 PM EST

The 12-year partnership between Madonna's Maverick Recording Co. label and the Warner Music Group seems headed for a rocky split.

On Thursday, Maverick filed a lawsuit against Warner seeking an end to the two companies' operating agreement as well as $200 million in damages, Reuters reports. The suit accuses Warner Music of fraud and false accounting concerning artists on the Maverick label. Former Warner Music owner Time Warner Inc. (parent company of PEOPLE) also is named as a defendant. A separate investment group recently purchased Warner Music.

At issue is the future of the artists on Maverick, which includes such performers as Michelle Branch and Alanis Morrissette.

Maverick owns 60 percent of its company, but Warner had the option to purchase that 60 percent stake at the end of the year. Madonna valued that percentage at $60 million, but she reportedly was offered less by Warner. This offer led to a breakdown in talks between the two companies.

Warner filed a motion in a Delaware court claiming it had fulfilled its obligations of the contract, a motion with which Maverick took issue.

A spokesman for Warner said the company wanted to prove Maverick's claims against the company were "baseless," Reuters reports. But an attorney for Maverick predicted that the matter would have to be settled in court.

"We've been trying to get these people to settle for a year now and we don't think we'll have any success in the future," Maverick lawyer Bert Fields said.

Warner's spokesman added that the issue should not reflect on Madonna, who has a separate recording agreement with Warner to release her music. "This effort to resolve ongoing contractual issues surrounding the Maverick Records joint venture agreement in no way impacts the company's deep respect for Madonna," he said.

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