As Apple moves closer to finalizing its Beats acquisition deal, a new report is out on a recently-filed lawsuit against the headphone-maker. The plaintiff is David Hyman, founder of music service MOG (now Beats Music), and he feels that Beats owes him a lot of money.
In the suit, shared by The Wrap, Hyman claims that he was offered a stout compensation package when Beats purchased his company and made him the CEO of Beats Music, which he never received. So now he’s suing the firm for at least $20 million plus interest…
Here’s more from The Wrap (via The Verge):
According to the lawsuit, Hyman entered into a purchase agreement for MOG in June 2012. Hyman was brought aboard as CEO, and nearly the entire MOG team was brought aboard the company.
The suit claims that, under an incentive plan adopted during Hyman’s tenure, he would be entitled to compensation including 2.5 percent of the company’s “currently outstanding equity interests,” with 1 percent due on the first anniversary of Hyman’s date of employment, and subsequent installments due in subsequent months. The suit also claims that he was promised a grant of 25 percent of the company’s outstanding equity interests following adoption of the incentive plan if the company achieved a fair market value of $500 million or more.
Hyman founded MOG in 2005, and stayed on as CEO until 2012, when it was acquired by Beats Electronics. As part of the deal, Hyman was brought on to head Beats’ music project, but he was fired just 7 months in for reportedly trying to terminate a valuable employee.
Connecting the dots, Hyman says he was intentionally let go before he could reach his 1-year anniversary so that Beats could avoid paying out his hefty incentive package. And with the company set to sign a $3.2 billion deal with Apple, he’s looking to get his piece of the pie.
The Financial Times reported last week that Apple was in serious talks to acquire Beats Electronics. Neither side has confirmed the news yet, as the deal is said to be taking longer than originally expected. But with messes like this to sift through, that’s not too surprising.