Tim McGraw has has suffered a setback in his latest fight against his former label, Curb Records.

The Court of Appeals in Nashville today ruled against McGraw and in favor of Curb Records, stating that he may have breached his contract.

According to a press release, “Curb Records contends that Tim is still under contract because he has not provided his Fifth Option Period Album.”

The court has allowed Curb Records to delay the trial as it gathers more evidence against McGraw and his “current” record label, Big Machine Records.

The sticking point is “20 new recordings” by McGraw, and who they belong to. McGraw recorded them and wants to release them with Big Machine Records, and Curb Records believes they belong to them.

In December 2011, the courts released Tim from his contract and allowed him to become a free agent, which led to his signing with Big Machine just over a month ago.

McGraw was signed to Curb Records for two decades. He sought a release from his contract after recording his album Emotional Traffic. Curb contested, but a judge ruled in McGraw’s favor late last year, releasing him from his relationship with Curb.

According to the press statement, however, “Curb Records believes that Tim McGraw is still an artist on Curb Records’ label” and that “Big Machine had no right to sign Tim McGraw until his contract with Curb Records is over.” We have not received comment from Big Machine as of press time.

In the saga of McGraw vs. Curb, we will keep you posted on the latest as this story develops.

You can catch Tim McGraw with Kenny Chesney on the Brothers of the Sun Tour in select cities all summer long.

UPDATE: A new statement from Tim McGraw’s camp is below.

“Tim McGraw and his counsel have received several requests for comment concerning a recent press release issued by Curb Records regarding the lawsuit between Tim McGraw and Curb Records. Rule 3.6 of the Tennessee Rules of Professional Conduct makes clear that it is not proper for attorneys to make such out-of-court statements that will be disseminated to the public.

It is proper, however, for Mr. McGraw and his counsel to clarify the record in light of Curb’s misleading and inaccurate press release. The Court’s only ruling was to postpone, at the request of Curb, the trial as to damages claimed by Mr. McGraw and by Curb. There was no ruling about anything else, and specifically there was no ruling regarding the substance of either party’s claims in the lawsuit. The Court’s ruling did not effect, in any way, Mr. McGraw’s relationship with Big Machine Records.

The Court’s Order on the postponement and its prior ruling issued on December 8, 2011 are public documents and are available on the web site of the Davidson County Chancery Court Clerk. Mr. McGraw and his counsel believe that the rulings speak for themselves, and that it is not proper for either of the parties to issue a press release regarding these matters.”

- Steve Koscik / US99.5