The Isley Brothers' secutritized bond offer, recently put on hold due to complications associated with Ron Isley's bankruptcy proceedings, was given new life last week when EMI Group plc settled its dispute with the R&B performer.

Earlier this month, Ron Isley was forced into bankruptcy because of an IRS claim on his assets of $1 million. Reportedly, EMI, which owns a 50% stake in the publishing rights of Isley's catalog, made an attempt to purchase Isley's assets as he went into bankruptcy weeks ago.

EMI's attempted purchase was contested by The Pullman Group, who structured the Isley's asset-backed financing, arguing that the purchase couldn't be made in good faith and was simply an attempt to block his bond deal.

However, both parties arranged a "mutually amicable settlement," and Pullman's suit was withdrawn. "It was a matter of principle," said Pullman.

Approximately one-third of the Isley Brothers catalog being securitized is controlled by Ron Isley. According to sources close to the deal, what Isley owes will be paid in it's entirety through the securitization.

Regardless of the bankruptcy, bondholders will still receive payment. "The bondholders are in the first position [to be paid]," said one source.

Not quite out of the woods yet, a number of parties are voicing their opposition against the structured bond deal. Michael Bolton reportedly may try to outbid the Pullman Group to acquire Isley's assets, and Marvin Isley and Christopher Jasper, who were at one time members of the Isley Brothers, fear losing their copyrighted material. These claims may cuse the bonds to hit a snag if the appeals go through.

Structured by the Pullman Group, the Isley Brothers' $30 million music royalty-backed securitization received a single-A minus rating from Duff & Phelps Credit Rating Co. It is expected to close within the next two weeks, sources said.

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