Dr. Dre and company co-founder Jimmy Iovine are being sued by former partner Monster in a new lawsuit that claims the two “betrayed” Monster in a fraudulent acquisition of the widely-popular Beats By Dre headphones line.
Several years before their lucrative $3.2 billion deal with Apple, Beats By Dre made a deal with electronic company and smartphone maker HTC. 51% percent (including Monster’s 5 percent share) of Beats was sold to HTC for $309 million–giving Dre and Iovine $100 million each. After Beats and HTC had a falling out in 2012, Dre and Iovine bought the shares back from HTC at a notable discount where Monster says it was cut out of the deal (and company) entirely.
According to the suit filed by Monster, the company claims that Dre and Iovine fraudulently acquired the Beats By Dre line during this transaction and as a result, cost Monster millions of dollars in the future sale to Apple. A two-year-old story from Gizmodo reports that the initial deal between Beats and Monster saw Monster providing all the hardware for the headphones, while Dre and Iovine retained “permanent ownership of everything Monster developed” related to Beats By Dre. The courts will now have to determine whether Dre and Iovine violated their contract, or if Monster simply made a bad business deal.
While no specific amount was mentioned, Monster is seeking general and special damages, along with punitive damages from Beats and HTC.