Dr Dre and producer Jimmy Iovine have been accused of scamming a business partner while operating their headphones company Beats.
According to a legal complaint filed in California by Noel Lee, the founder of audio cable maker Monster, the pair duped him into terminating his association with Beats shortly before the company was sold to Apple for $3bn. Monster is believed to have had a fundamental role in designing the original headphones.
Lee had held a 5% stake in the company, and claims that Dre and Iovine orchestrated a “sham” deal with smartphone maker HTC in 2011 which in effect terminated the Monster partnership. His suit alleges the deals caused him to cut his stake to 1.25%, before selling his holdings for $5.5m in autumn 2013. He says he was told there were no plans to sell the company for several years.
Leet alleges that this ended up costing him a fortune when the company was sold to Apple. His 5% stake would have been worth $150m had he kept it. But in 2013, Lee said he had been paid “very generously” when the association ended, and that the split was “amicable”.
Beats has been at the centre of legal wrangles in the past. David Hyman, who sold his music streaming service MOG to Beats in 2012, is suing the two men for bad faith.
Apple hase yet to comment on the Lee lawsuit.
