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.
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.
At the same time, to not understand that the lead designer (of not just every key Krell component ever made, but the all-time classic Aragon 4004 amp) can be a bit difficult to deal with is a key misunderstanding at the heart of the dispute. Enzo Ferrari wasn't exactly Dale Carnegie but he sure made one hell of a sexy, high performance car and it is not a stretch to compare Krell with Ferrari or Dan with Enzo.
In the end, Krell needed money and new management; yet the company is still the cult of personality of Dan D'agostino. Their clients, dealers and reps all know that. Moreover, Krell has always been a family business and it will take time, marketing and more innovative products under the Krell name to change that in the years to come. In an industry where public companies and private equity firms have bought (nearly always with bad results) personality-driven AV companies - now is the time for a settlement between the two parties in this dispute. A protracted, he-said she-said lawsuit will likely yield no winners except the lawyers. Consumers will always love and covet Krell and they will always respect Dan and his legacy. Now is the time is to make things right and to settle the dispute and smooth over any hard feelings, as Krell will certainly continue on successfully, just as Dan will likely engineer, promote and sell some of the world most lofty audiophile and videophile electronics.