Beats music service sued by former executive amid possible sale to Apple

Sat May 17, 2014 8:22am IST

The Apple logo is pictured on the front of a retail store in the Marina neighborhood in San Francisco, California April 23, 2014. REUTERS/Robert Galbraith/Files

The Apple logo is pictured on the front of a retail store in the Marina neighborhood in San Francisco, California April 23, 2014.

Credit: Reuters/Robert Galbraith/Files

Related Topics

Stocks

   

REUTERS - Beats Electronics, which is close to being sold to Apple Inc for $3.2 billion, has been sued by the founder of a music service Beats bought two years ago claiming he has been cheated out of his share of the company.

David Hyman, the founder of the music subscription service MOG Inc, filed a lawsuit on Wednesday in Los Angeles superior court claiming he was purposely terminated so that Beats could avoid granting him his equity stake in the company.

Hyman claims that as part of the agreement Beats made to buy MOG in 2012, he would have been granted, over a period of time, 2.5 percent of the outstanding equity interest in Beats if the company reached a market value of $500 million or more. But Hyman was terminated less than a year after the deal, which prevented him from "receiving the fruits and benefits" of the transaction, according to the lawsuit.

The lawsuit, which makes claims for breach of contract, is seeking $20 million in damages.

A Beats spokeswoman had no comment.

Rapper Dr. Dre and legendary music producer Jimmy Iovine, the founders of Beats Electronics, were not named in the lawsuit.

(Reporting by Andrew Longstreth in New York; Additional reporting by Lisa Richwine)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Rising Star

Reuters Showcase

Cybercrime

Cybercrime

Hacker sentenced to 21 months in U.S. prison for $15 mln scheme.  Full Article 

Printed Instruments

Printed Instruments

3D printed instruments make sweet music in Sweden.  Video 

Tweet Debut

Tweet Debut

Britain's Queen Elizabeth sends her first tweet.  Full Article 

Artificial Intelligence

Artificial Intelligence

Google bolsters artificial intelligence efforts, partners with Oxford.  Full Article 

Fighting For Workers

Fighting For Workers

Ralph Nader urges Apple to reduce buybacks, improve wages - WSJ.  Full Article 

Future Uncertainty

Future Uncertainty

Ericsson flags North America slowdown.  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

Looking To Sell

Looking To Sell

HP seeking buyers for corporate-networking business in China - WSJ.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage