Firstly, let's note that this is completely unverifiable. Frankly, I'm not even sure where I heard it. Probably Pitchfork. Back when I read about music, they were often the source. Yay pretension! Anyway, here we go.
So in 1996 a wonderful band named The Wrens had just released their second album, Secaucus, on Grass Records. As happens when money changes hands, they began to get a bit of airtime on the radio, with 'Surprise, Honeycomb' getting some push behind it. Things were looking fairly good. Then they were called into the office of the head of their record label. He told them that he wanted to sign them to a million-dollar contract. However, they had to make a few changes to their sound so that they would be more radio-friendly. As a good-faith negotiation tactic to help ease the shock of this demand, he ordered that they decide on the spot. Faced with this strong-arming the band chose integrity (Some people actually do! They are poor and get no airtime) and rejected the deal. Their label executive took it well, ordering them out of his office and pulling all publicity for the album. He announced that the next band through the door would be made famous at any cost. Grass Records was closed and rechristened Wind-Up, and the next band to walk in, much to the world's chagrin, was Creed. The Wrens went off to obscurity (They also wrote a great song about this, entitled 'Everyone Choose Sides'), and Creed became famous. As a sort of postscript, once the label had won, they decided that they best way to patch things up with the band would be to refuse to print anymore copies of either of the first two Wrens albums once the stock was sold, and to refuse to sell the copyrights to the albums The Wrens had written back to the band for 7 years, preventing them from making any money from, or even distributing their work. The music industry is a nice place. May it burn to the ground.