Beats Electronics and Music certainly got a tidy sum to become a part of Apple, in fact, the $3 billion deal is the iPhone maker’s largest acquisition to date. But a lawsuit from a former partner of Beats executives Dr. Dre and Jimmy Iovine claims that the duo swindled him out of his chunk of that very lucrative pie.
A complaint filed Tuesday in San Mateo Superior Court accuses Dre and Iovine of duping Noel Lee, who happens to be the founder of video and audio cable maker Monster. He alleges that his partners worked out a “sham” deal with HTC in 2011 that allowed them to sever their connection with Monster, reports the Associated Press.
Before that split, Lee held a 5% stake in Beats as a result of that former partnership. The suit alleges that Dre and Iovine’s machinations saw him cutting his stake to 1.25% before selling off the rest for $5.5 million in late 2013. This, after Beats executives allegedly assured him that the company wasn’t going to be sold in the immediate future.
Cut to May 2014, when Beats comes out and says hey, Apple is buying us for $3 billion, making Dre and Iovine Apple executives in the process.
That 1.25% stake could’ve reaped more than $30 million, Lee’s suit claims, and his original 5% would’ve netted about $150 million.
It’s unclear how much Dre and Iovine each made from the deal, but it’s assumed to be a hefty chunk of change, as Lee claims the two both owned 15% in the early stages of the Beats partnership.
Apple declined to comment on the lawsuit, and is not named in the complaint. Other listed defendants include HTC America Holding Ltd. and Beats investor and board member.
Lawsuit alleges Dr. Dre, Jimmy Iovine swindled Beats partner [Associated Press]
by Mary Beth Quirk via Consumerist
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