Monster has reportedly filed a suit against Beats and its co-founder Dr. Dre and Jimmy Iovine. The audio equipment maker alleges that the latter two concealed their business dealings and also cut them out before being sold to Apple last year for $3 billion, Wall Street Journal reports. Also Read - HTC Desire 20+ launched with 48-megapixel quad rear camera setup
Monster’s relationship with Beats goes back to the time before the latter became famous for its high-end audio products. In fact, Monster helped co-design the original Beats headphones in 2008. The company however claims that Dre and Iovine slowly cut out Monster and its CEO Noel Lee out of all dealings especially the one involving HTC. Also Read - HTC Wildfire E Lite smartphone design leaks online
Monster claims that it was kept in dark about the deal with HTC in 2011, wherein the Taiwanese company purchased a 51 percent stake for $300 million. Dre and co. however repurchased 25.5 percent of its own shares, and subsequently ended its partnership with Monster due to a change of ownership clause. If that wasn’t enough, Beats also forced Monster’s distributors and retailers to choose between the two companies, and the former ended up with most of them. According to court documents obtained by USA Today, HTC is listed as one of the defendants for allegedly being a part of the “sham deal.” Also Read - HTC Wildfire E Lite listed on Google Play Console
The lawsuit further alleges that the lack of transparency in the deals is what forced Lee to sell his 5 percent stake in Beats. He also claims to have been misled by a board member that no “liquidity event” was on the horizon for the next year or two. If Lee had however held on to his shares, they would have been worth more than $100 million.
Monster’s messy breakup with Beats has been well documented in a 2013 Gizmodo story, which reveals how the former lost control of the $300 premium headphone market.
Monster’s full complaint against Beats follows.