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MOG’s Founder Sues Beats for Cheating Him Out of $20 Million…


Beats Electronics’ management is about to cash in, as Apple is expected to buy the company for $3.2 billion.

While that happens, the CEO of a company that Beats acquired says he was cheated out of millions, according to The Wrap.

In mid-2012, Beats purchased music streaming service MOG. Beats Music was built using some of MOG’s technology. As part of the deal, MOG’s Founder/CEO David Hyman and most of MOG’s employees joined Beats.

David Hyman was supposed to receive 2.5 percent of Daisy LLC’s “currently outstanding equity interests”. The first percent would come after one year of employment, with the rest coming the following months. If the company reached a market value of $500 million or more, Hyman would get 25 percent of the outstanding equity interests. Daisy would eventually become Beats Music.

Hyman was sacked for trying to fire an employee before reaching one year at Beats. He says Beats purposefully fired him to avoid paying him the incentives he was owed.

Hyman is seeking $20 million in damages with interest.

 

When Nina Ulloa isn’t writing for DMN she’s usually reviewing music or at a show. Follow her on Twitter.

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Comments (8)
  1. Billy

    Of course you realize this means WAR


    Reply
  2. Anonymous

    Good! David is a smart guy, and I tend to think Ian had a hard time not believing he was the smarted guy in the room. Ian has done a great job of taking others ideas and making them his own, so I have never understood why he gets so much praise as an industry thought leader? When TopSpin was on fire, he was out making a name for himself, increasing his own visibility. In the end, are the Beats guys going to let a $20m suit get in the way of a $3.2b deal, I doubt it.


    Reply
  3. Shadow

    Hyman threw shade on Reznor. Reznor told Jimmy ‘it’s him or me’. Jimmy and Reznor are like blood. Hyman knew that, and overestimated his proximity to the throne. Not a recipe for longtime employment.

    Timing of this suit is smart though, despite the steaming pile of his termination being an equity dodge. If he gets a payout, it’ll amount to a convenience fee on a fast close with Apple. Tim Cook has had a long week already.

    For Hyman, even the non grata seats are comfy when padded with $20M. Besides, in time, this too shall pass. Maybe soon, if he can flip another exit with Chosen. He’s wasting no time on that front.


    Reply
  4. frank

    ‘seems to me that the Beats/Apple deal should have closed by now . . .


    Reply
    1. Paul Resnikoff

      I haven’t heard to ‘official official’ yet. Obviously I think it’s a bad deal and a bad idea for Apple, so I’m hoping they take the last exit before the toll.

      Who knows what happened with David, I don’t have inside info on that. Hey, maybe they’ll just toss him $10 million and tell him to enjoy it. Their yachts will always be bigger than his.


      Reply
  5. John Cranfield

    There is an interview between Ian Rogers and David Hyman from a few years ago. Search ‘This Week in Music – David Hyman’ on YouTube.


    Reply

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