AP reports that an LA judge has dismissed a claim by Monster founder and former Beats shareholder that the company tricked him out of his share of the company prior to its acquisition by Apple. Noel Lee had claimed that double-dealing and misrepresentation by Dr. Dre and Jimmy Iovine cost him a between $30M and $150M.
Lee filed the lawsuit back in January of 2015, making two main claims against Beats. The first alleged that the company entered a ‘sham’ deal with a smartphone maker, selling 51% of the company to HTC before later buying it back. The sale triggered a clause in the contract that ended the partnership between Beats and Monster …
Lee alleged that the sale and repurchase was a deliberate legal manoeuvre designed to allow Beats to end the alliance while allowing the company to continue to use the headphone tech created by Monster. The HTC deal also persuaded Lee to sell most of his 5% share in Beats, retaining just 1.25%.
Lee further claimed that misrepresentations by Beats convinced him to sell his remaining stake a year before the Apple acquisition. In all, the lawsuit made 11 separate complaints, from fraud and deceit to violations of corporate law.
Los Angeles Superior Court Judge William Fahey issued a summary judgement a week before the case was due to go to trial. A trial will still proceed, but will now address only a counterclaim by Beats for Monster to pay its legal fees.
The lawsuit had alleged Beats’ misrepresentations had caused Lee to sell his remaining 1.25 percent stake for $5.5 million in 2013. That would have been worth more than $30 million had he owned it at the time of Beat’s sale to Apple Inc. Lee’s original stake would have landed him roughly $150 million.
