Controversial music service Grooveshark is an acquisition target for an investment firm looking to reinvent the site and build bridges with major labels, according to reports.

CNET sources say that Avi Faliks’ investment firm Spring Mountain Capital has approached the company with a view to hiring entertainment attorney Gary Stiffelman in a bid to build a Grooveshark model that labels could work with.

Stiffelman has in the past represented the likes of Lady Gaga, Trent Reznor and Justin Timberlake, and Faliks wanted to use him as a go-between with labels to gain their support and ultimately drop their lawsuits.

CNET also reports, however, that Grooveshark and Escape Media are waiting to hear from another unnamed potential investor before showing interest in Faliks’ offer.

The music service has come under heavy fire from major labels, three of which have hit it with copyright lawsuits. The site’s model allows users to upload songs for others to stream.

The only major not to take Grooveshark to court over copyright was EMI, having licensed its music to the service. It did, however sue Grooveshark, claiming that it had failed to pay an agreed $450,000 as part of the deal.

CNET reports that action has now been settled and Groovshark has paid at least some of the outstanding figure.