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
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)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.