50 Cent Owes $16 Million To Headphones Company
Posted by Joseph Lee on 04.09.2014
After he lost a lawsuit...
Radar Online reports that 50 Cent (who is worth $500 million thanks to his sponsorship deal with Vitamin Water) owes headphones company Sleek $16.1 million after losing a lawsuit. The company claimed that 50 stole their design and a judge agreed. The legal battle went on for a year but a judge ordered 50 Cent ot pay $11,693,247 in damages, plus $4,488,331 in legal fees.
Sleek sued last year after he planned to release his own headphones but it never happened. He invested over a million with Sleek to start his own line but then produced a different set with a different company. Sleek said that the headphones, Sync by 50, were "basically the same design, mechanically" as the model they had developed.
Jackson claimed that "certain security lapses" let Sleek's competitors find their design but an arbitrator discovered that "there was no evidence presented by Jackson that such alleged lapses … resulted in any public disclosure of any trade secret or confidential information of Sleek." Jackson's team used their knowledge of the original design to make a similar version. Sleek also claimed that Jackson and his team stole confidential private client information from a website Sleek created to promote the headphones before they were created. The website had email addresses and other data from 3,639 possible customers which disappeared when Jackson's team was given the password. They claim it was "very valuable information."
When Sleek emailed Jackson's team, his personal business manager Nicolee Martin wrote: "[Sleek] is onto us, LOL. They emailed and called … about the data." Another member of Jackson's team replied: "Tell him something like, sorry, you just have to finish editing a video for 50 or something, we'll get to it, LOL"
Jackson was sued for "misappropriating trade secrets, breaching his fiduciary duty owed to Sleek, participating in a civil conspiracy, breaching his confidentiality agreement with Sleek, and being unjustly enriched." Jackson filed a counter-suit that claimed Sleek fraudulently convinced him to enter an investment with them and then breached their "fiduciary duties". An arbitrator sided with Sleek, granted their claims and denied Jackson's. The interim agreement gave them $11,693,247 in damages, along with legal fees. 50 had been trying to get out of paying the additional fees but the arbitrator signed off on a final agreement, giving Sleek legal fees of $4,488,331 in attorneys' fees for a total of $16,181578.
The arbitrator wrote: "[Sleek's founders] did not have a good head for business. Thus the arbitrator can sympathize with Jackson's growing frustration that he was putting money into Sleek and not, in his opinion, seeing the results that he assumed would be forthcoming on a timely basis. Likewise, the arbitrator can appreciate the [Sleek team's] frustration with what they perceived to be Jackson's team taking control of their company … However, Jackson's frustrations do not justify the actions he took or were taken on his behalf …"