updated 02:44 pm EDT, Fri May 16, 2014
David Hyman fired to avoid compensation payments, lawsuit alleges
The founder of MOG, the music subscription service that was to become Beats Music, has sued Beats Electronics over a loss of earnings. David Hyman claims he was fired from the company before he was able to earn shares in the company, with the situation exacerbated by the anticipated acquisition of Beats by Apple for an estimated $3.2 billion.
The lawsuit claims Hyman would have received 2.5 percent of the company's "currently outstanding equity interests" if he stayed with the company, reports The Wrap, with the first 1 percent provided on the first anniversary of Hyman's employment, and the remainder provided as time went on. Aside from the agreement at the time of the MOG purchase, Hyman was also allegedly promised a grant of 25 percent of said equity interests in an incentive plan if the company reached a fair market value of at least $500 million.
Hyman failed to survive the first year, as the lawsuit alleges he was sacked for trying to fire another, apparently problematic, employee, though it also claims it was deliberate in order to avoid paying Hyman at all. The suit seeks compensation "in excess of $20 million" plus interest.
The timing of the suit is apt, as recent speculation has Apple looking to buy out Beats Electronics for a large sum of money. If Apple does announce an acquisition of the electronics and streaming music company, the lawsuit could potentially become even more expensive to Beats if it loses.