What Happened At Krell and Why The D'agostino Family Is Out

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Krell is one of the most respected and lofty brands in high end audio history. This summer - much like many specialty AV companies who are looking to be able to produce, design and license the latest and greatest new technologies in AV - Krell looked to new investors by the name of KP Partners. The D'agostino family wouldn't be the first and certainly not the last who needed short term funds, more high-level management and other external help in order to grow; yet something went very wrong with the relationship very quickly.

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• Read more industry trade news from HomeTheaterReview.com.
• Learn about Dan D'agostino's new company.

Krell was founded by Dan D'agostino and his now ex-wife and Krell President, Rondi, 29 years ago. Dan's oldest son, Bret D'agostino, up until the sweeping changes, was one of Krell's technical gurus. But only months after bringing in new partners and right about the time of the CEDIA tradeshow in early September 2009 - the entire D'agostino family was out at Krell. Literally, clean out your desks and goodbye.

What exactly happened that turned the deal so acrimonious so quickly is unclear. However, the new investment group has made a power play to gain control of the company, with its founders being escorted to the door of the company they created nearly three decades ago. The details of this dispute are now the basis of a lawsuit filed by the D'agostinos against the new partners in hopes of wrestling control of the company back. Even as Dan and Rondi sit on the board, have the majority of stock, yet somehow have lost voting control that governs the direction of the company.

Like watching a family divorce, the AV industry has been sitting back this fall hoping that the two parties can find an amicable solution to their most pressing issues. To give them credit, the new partners have quickly put the company in position to launch a new series of their Evolution series products as well as announced the pending Consumer Electronic Show 2010 debut of a Krell Blu-ray player. They have additionally committed to show at a new regional consumer show and have made various promotions and personnel changes. Clearly, they are not sitting back waiting to see what comes next. They are taking their future in their hands.

Continue read about what happened on Page 2.

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  • Comment on this article

  • By theKevin

What happened at Krell? Why is the D'agostino family out? I read the article, and I still don't know.
Maybe the title of this article could also use some extra "high-level management".

  • By Jerry Del Colliano

Kevin,

Where else are you reading this story? Nowhere.

Krell needed money. The brought in a private equity firm to help. Within months, the parties are at war and the founders are out. Law suits are filed. What more do you need to know other than the REALLY should find a way to settle.

I wouldn't pay for the TMZ photos of Dan being tossed out of his office but somehow I think that is what you are looking for....

  • By theKevin

I would love to see some TMZ photos of Dan being tossed out of his office, but I would settle for the answers to the questions. I'm just saying, it's a funny title considering the lack of specifics.
Thanks for writing it, I haven't heard about it anywhere else and I'm glad I subscribe to Home Theater Review on Facebook.

  • By Jerry Del Colliano

I am glad to see that our Facebook effort has paid off. We have 11x more fans than any other AV site. It has REALLY helped us to grow.

I was joking of course about TMZ.

Dan is a friend and things could have been handled differently. Krell is a client and they have a bright future in front of them with TOP LEVEL products and a great history.

The two parties need to find a way to settle and move forward. Its an odd deal but this is where things are at with the deal.

Jerry

  • By Glenn Smollinger

Well it's an old, old story. Entrepreneur needs cash to keep his baby alive, takes on partners who throw him out. Robert Moog lost the rights to use his own name on music synthesizers. Anybody remember Bob Carver? Those money men have only one agenda: Return on investment, and when the original owner says "No" to their ideas, they have Plan B ready the day they walk in with the money.

  • By JimScar

A similar scenario played out at Electrograph over the last several years - until it went belly up. Having a pocketful of cash seems to make some people think they know better than experts in the industry in which they are investing. Daniel Schneider syndrome. "I'm the boss. I have money. I'm always right. Why aren't my ideas working?"

  • By Jerry Del Colliano

Interesting....

I SERIOUSLY doubt Krell is going out of business. They are now well funded and making moves for the future that respectfully that most AV companies are. Investing, promoting, new products etc...

What I would like to see is a settlement. Things happened. Things got said. There would be no Krell with out Dan and Rondi. Those are facts. Its also likely factual that there isn't going to be Krell with Dan in the future. They should all move on and work on being positive.

  • By Travis

I agree with Kevin.

This article should have been summed up saying "Hey! Krell's new investors kicked out the founders of the company! Don't you think that stinks? I do! I say they should reconcile!".


But the details of the What and Why in this matter are not covered in the story.... So I guess I'm missing the point, unless it's to fill space.

  • By friede

well jerry, there's a very simple solution for anyone that supports the d'agostinos - boycott krell until all the asshole investors lose everything - then let the d'ags take back what's theirs to begin with. who had the authority to actually physically kick dan and rondi out of their said offices? someone would've had to kill me to get me out of that position, much less my office of 30 yrs. it just all seems absurd, and that's why you set control stipulations BEFOREHAND, to prevent these types of messes. hostile takeovers are just that, and after working in investment banking, i damn well know better - as they should have as well! i wish them luck with this mess, as money grubbing "investors" are always after the one thing that they want, and that's EVERYTHING!

  • By alf

well jerry, there's a very simple solution for anyone that supports the d'agostinos - boycott krell until all the asshole investors lose everything - then let the d'ags take back what's theirs to begin with. who had the authority to actually physically kick dan and rondi out of their said offices? someone would've had to kill me to get me out of that position, much less my office of 30 yrs. it just all seems absurd, and that's why you set control stipulations BEFOREHAND, to prevent these types of messes. hostile takeovers are just that, and after working in investment banking, i damn well know better - as they should have as well! i wish them luck with this mess, as money grubbing "investors" are always after the one thing that they want, and that's EVERYTHING!

  • By WS

Just to be fair, the Bret D'agostino I know certainly isn't close to being one of Krell's "technical gurus." And Dan did many of things while he was Krell's CEO, but he is not an engineer. The last time he engineered anything was 1980, and I think he would admit that was an abomination compared with the pro-engineered stuff that was produced after the company got off the ground. Behind the Krell name is a history of three or four chief engineers charged with actually making the stuff. I'm just say'n.

  • By PR

I don't like to see founding entrepreneurs lose position in and control of their companies, but the truth is, it's usually their fault. They enter into financial agreements without fully understanding the bargain they made. It doesn't matter that they had lawyers present to negotiate for them, review documents and offer advice. It's the emotional reality of change of control that they've failed to realize. And in securing either investment or an exit for themselve, extracting from the company value that had been locked up in it, entrepreneurs seldom grasp that investors must operate for value accumulation, which generally collides with the founder's personal agenda.

But in this case, it's all for the best. Krell was among the purveyors of foul sound that led high end audio through a dramatic wrong turn in the early 1980s, institutionalized by the flannel-eared endorsers in the critical cadre covering audio who deafly deemed that tone-bleached, dessicated, brittle sound somehow real. The result was an unbroken legacy of ugly, nails-on-chalkboard gear uninterrupted by even a single model of sonic quality. It was particularly impressive that the company's amps could illuminate an incandescant lamp, but fail completely to reproduce an audio signal even remotely similar to music.

So perhaps D'Agostino's exit is for the best. The new guys will either improve the line, or their ignorance will make it much easier for the market - unburdened of sentiment for Dan - to objectively discover that Krell electronics were junk all along.

  • By Jerry Del Colliano

Foul sounding Krell? Are you crazy?

You might not like the sound of Krell personally but it is FAR from fowl sounding. In fact the Krell Evolution gear that I had in my system was the best electronics I have ever heard and I have owned Cello, many Mark Levinson, Meridian, Classe and other audiophile grade products. The best bass, very open highs, powerful.

  • By PR

What are "open highs?" "Powerful?" We learned decades ago that "powerful" is possible in audio systems that are sonically poor imitators of real voices and instruments, and that convincing illusion and tone can be produced by systems that aren't powerful at all. What constitutes an "audiophile-grade" product? I've been at this even longer than you, and all of my gear has been "audiophile grade," yet obviously we don't agree. The distinction is conceptually useless, since we've all met audiophiles who are poor judges of the sound of music. What you've owned is an irrelevancy, if most (not all) of what you cite was produced by willing travelers in the "wrong turn" for audio that I mentioned.

The single redeeming quality of Krell amplification in the entire history of the company so far was ability to competently drive Apogee speakers, which were difficult for most amplifiers of the day. Still, almost anything else that could drive them sounded better. You can see in the persistence of vacuum tube amplification, in the underground movement that led to the rebirth of SET, and in the thriving "Gainclone" market the reaction to Krell and its ilk by those who recognized that the Krells of our world are incapable of producing sound even remotely akin to the tone of instruments played live. Your vaunted "powerful" and "open highs" are secondary or tertiary characteristics that mean nothing if primary attributes like tonal body & fidelity, octave-to-octave balance and convincing timbral reproduction are absent. This is the root of audio's wrong turn a quarter century or so ago. Imposing metal cloaking toneless power and scale, making grating noise regardless what's fed into it. Krell defines the mistake.

It's easy to just say, "...well, I can't help it if you can't hear." But perhaps you can. I can't tell one way or the other by the evidence in your blog. So let's extend benefit of doubt and assume you're a competent listener. Unfortunately you acquired your habits and your reference criteria for good sound after high end audio's establishment veered off to embrace bombast over tone, spectacle over fidelity, flash over competence. The twin 1980s events of heaing reviewer-praised Krell amplification and Duntech Sovereign loudspeakers signalled that high end audio was headed off on a comic jag unmoored from any objective to reproduce convincing sonic realism. And here we are, a quarter-cenury later still mired in and distracted by the unending milled-aluminum bender. Notwithstanding the SET and Gain Card insurrections, the misplaced regret for the ouster of D'Agostino from his own company suggests high-end audio is still deleriously drunk at the bar. We should cheer D'Agostino's departure from Krell and hope that his namesake company is pulled under the waves. There are far better amplification engineer-entrepreneurs waiting to take his place, promising much better results.

  • By Jerry Del Colliano

With all due respect - this is the biggest steaming load of bullshit I have ever read.

What the hell does 1980's audio have to do with Krell of today?

Moreover, using terms like "powerful" and "open highs" are like describing a Super Tuscan as being "bricky" or "fruit forward" - its ways to put words to sounds or tastes and until I can find a way to turn HomeTheaterReview.com into a teleportation website - that's the best way we can describe the way modern high end sounds.

To me, it sounds like you have a thing for Dan personally. I know Dan well and I am sure he would love to see you make amps that perform and more specifically sell better than his. Note: he also designed the Aragon 4004 - which might have been the best sounding - bang-for-the-buck amp of the 1980s (calm down Adcom GFA 555 owners).

Personally, I would have kept the Evolution 900 mono blocks if they would have fit into my racks (Middle Atlantic). I have to get to installing some Mark Levinson No. 53's and the new Classe mono blocks. Please feel free to post hate about Crown's designers on the No. 53 and how Classe ruined their new $15,000 mono blocks by making them run at a lower operating temp.

  • By PR

I know the full lexicon of normative audiophilia, from real-time reading of Holt's first scribblings and Bert Whyte's erudite reviews along with the much-later debut of Absolute Sound, but in your case using the terms and communicating something meaningful are not the same things when defending Krell. The terms are meaningless if the hierarchy of relevance to convincing realism isn't established.

I don't know Dan D'Agostino, nor have I met him. My commentary isn't personal in the least; it's strictly a qualitative judgment of his products. The pertinence of 1980s audio is that the vector of aural exaggeration and tonal dessication fouling hi-fi today began then. Krell's signature bleached, bombastic sound was born then and infused every product made by them since. That the Aragon 4004 -- mildly credible in relative terms but mediocre on any absolute assessment of musicality -- was more listenable than Krell's more costly amps only puts a point on how wrong Krell had gone.

You commit the logical error of attacking the source when suggesting I can't make amps that perform and sell better than D'Agostino. Whether I can or can't is impertinent to the issue at hand: Have Krell electronics *ever* sounded good? My answer is no, and whether what I or anyone else can build sells better or worse is irrelevant to that question. The listener does not have to be an engineer of the type of gear he or she is listening to, to be qualified to judge its output.

Audio will benefit from the demise of Krell and their many co-religionists destroying any semblance of musical sound. An emerging cadre of select electronics designers in China seem to be well-grounded in how music actually sounds, along with the people and instruments that produce it. Killing off (through economics) companies like Krell might be their great indirect favor to audiophiles who love music first, though we certainly want to see new American companies emerge. While modern Mark Levinson or Classe amplification are not top of my rank for hi-fi credibility, both put you in a far more convincing realm of reproduction realism than Krell Evolution, so it seems you're making progress. I certainly endorse progress, however incrementally is comes.

  • By Jerry Del Colliano

Knowing Dan AND the people who still run Krell - I can tell you that the idea that they somehow went out of their way to make less musical products is 100 percent absurd. Fully laughable.

Find me a better sounding AV preamp in the market than a Krell Evo 707? Find me more dynamic amps than Evolution 900s? Find me a brand that wins more awards for audio performance from critics in the US and abroad?

Seriously, you have to be kidding in attacking Krell's sound? This is a joke right? Their stuff is TOP NOTCH. They are in the highest level along with Audio Research, Mark Levinson, Classe and few others when it comes to electronics. Totally blue-chip and as dedicated to the reproduction of music as humanly possible.

  • By PR

Krell didn't go out of its way to make musically uncredible products. The company just didn't / doesn't know how to make something good. The engineering world is full of qualified technicians absent any understanding of musical fidelity. No, I'm not kidding in attacking Krell's sound. The company is one of the landmark purveyors of wrong-headed design resulting in scandalously unmusical sound. The failure to deliver aural fidelity is made more glaring by the high craftmanship of their ugly packaging, the careful internal build quality and the pricing made laughably ridiculous by how bad the sound is. If amplification is chosen by tactile and visual evidence of quality alone, without ever turning it on, then of course Krell is in the top rank. But on first note the lie is revealed. Krell amplification would be fraudulent on sound quality, if it weren't for the dismayingly high incidence of fraudulent sound coming from many competitors led into a sonic abyss by D'Agostino et al, so many years ago. Perhaps I was too generous and should assume you in fact cannot hear. But I am quite serious in pronouncing Krell's entire output of gear as sonic junk, albeit made to a very high material standard. There should be no caterwauling over the exit of D'Agostino from Krell; instead hosannas. And the faster the company dies sans him, the better. The prospect of musical reproduction from high-end hi-fi will instantly brighten.

But perhaps I've forgotten: your topic is home theater. That explains your tears. A better AV preamp? Who would buy such a thing who seeks musical realism?

  • By sfulmer

PR,

1) Wow, you got lots of anger and pseudo-intellectual bs in your brain...wonder how that plays into your psychology in not being able to enjoy music coming out of a krell system...
2) Funny, how you slam Jerry's reference about home theater, yet this website is hometheaterreview.com
3) I own a complete Krell Evolution system including a pair of the Evolution One amplifiers. I absolutely love the system and the sound. But, since you are so certain that the sound is bad...lets focus on that for a moment: a) Each recording has a very different sound and tonal sound to it...so the system just reveals those aspects better than most systems I have used...can't blame the equipment for tonal attributes of the recording, b) Recently, I interchanged, used and owned Martin Logan Ascents, Martin Logan Summits and Krell Modulari Duo Primos in the system. ALL three speaker systems sound very different, in the same room with the same equipment with the same recording source...so, it is not possible to single out the equipment as the source of good or bad sound attributes.
4) I recently visited the CES 2010 show, and moved from room to room listening to various systems. One thing is for sure, systems do sound very different...but again, many factors are the root cause...the source, the room characteristics, how loud the system is played, etc etc...so, really what I am saying is that what you like comes down to your taste...and you can target your perference (taste) by adjusting the multitude of factors that affect it...however, blaming a Krell amplifier as the primary determanent of the sound is rediculous...
5) Given that I own a $100k+ system already, if I genuinely wanted other equipment because I thought it sounded better...I would just go buy it...this has been my primary hobby since grade school...I buy what I want and like...
6) I also own a Bosendorfer 225 piano. Music doesnt get any more live or pure than that...yes, I can tell the difference between the real piano and the system, but no system that I have heard recreates an actual piano sitting in front of you. On the other hand, I grew up listening to rock music, which has a heavy electric element to it...the source instruments, as well as concerts are heavily communicated through high volume, low quality PA systems...so, again, to say that the Krell equipment is subpar is a joke.

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