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NO.
C I V I L DISTRICT COURT FOR T H E PARISH OF ORLEA^gQJJQ J^ -| ^ STATE OF LOUISIANA
DIVISION'
YOUNG MONEY ENTERTAINMENT, L L C and DWAYNE M I C H A E L C A R T E R , JR.
VERSUS w-w-ow)
CASH MONEY RECORDS, INC.
F I L E D : ; DEPUTY C L E R K
V E R I F I E D PETITION F O R B R E A C H O F OBLIGATION. B R E A C H OF FIDUCIARY DUTY, UNJUST ENRICHMENT.
ACCOUNTING. ANTICIPATORY B R E A C H OF CONTRACT. CONVERSION, D E C L A R A T O R Y JUDGMENT. DAMAGES.
APPOINTMENT OF A TEMPORARY R E C E I V E R AND/OR IN T H E A L T E R N A T I V E . DISSOLUTION AND APPOINTMENT
OF A TEMPORARY LIQUIDATOR. APPOINTMENT O F PERMANENT R E C E I V E R AND/OR IN T H E A L T E R N A T I V E A PERMANENT LIQUIDATOR. ISSUANCE OF PRELIMINARY
INJUNCTION. ISSUANCE OF PERMANENT INJUNCTION AND REQUEST F O R T R I A L B Y JURY n
N O W INTO COURT, through undersigned counsel, come Plaintiffs, Y O U N G M O N E Y '
ENTERTAINMENT, L L C , ("Young Money LLC") , and D W A Y N E M I C H A E L CARTER, JR.
("Carter"), who respectfully represent as follows:
T H E PARTIES
1. 1 x n ' m : 7
Plaintiff, Carter, (p/k/a " L i l Wayne") is an internationally acclaimed, Grammy-Award
winning songwriter, rap artist, producer and entrepreneur. Plaintiff is a citizen and resident o f
the State of Florida.
Plaintiff, Young Money LLC, is a limited liability company organized under the laws o f
the State o f Delaware wi th a principal place o f business in Miami , Fldrida. Carter i s the sole
member o f Young Money L L C .
VERIFIED. Barters Gaude Deputy C t e r k . # "
Young Money L L C is the owner o f the right to furnish to third parties the professional
services o f Carter and also owns and controls a 49% interest in a joint venture wi th Defendant
Cash Money Records, Inc. known as "Young Money," more particularly described below
(hereinafter the "Young Money Label"), which is set to expire by its own terms on June 4, 2015.
4.
Young Money L L C and Carter are sometimes, collectively, referred to herein as
"Plaintiffs".
5.
Upon information and belief, Defendant, Cash Money Records, Inc. ("Cash Money"), is
an American record company, incorporated under the laws o f the State o f Louisiana with a
principal place o f business in the City, County and State o f Florida.
6.
Cash Money is in the business o f producing, manufacturing, licensing, distributing
(through third parties) and otherwise exploiting throughout the world sound recordings
containing the musical performances o f numerous recording artists.
7.
Cash Money was founded by brothers Bryan Williams ("B. Williams") and Ronald
Williams ("R. Williams") in or around 1991.
8.
Upon information and belief, B . Williams, p/k/a "Birdman" is the co-CEO o f Cash
Money with R. Williams and is also a hip-hop artist.
9.
Upon information and belief, R. Williams, is the co-CEO of Cash Money with B.
Williams.
JURISDICTION AND VENUE
10.
Louisiana has subject matter jurisdiction over this matter pursuant to Louisiana Code o f
Civ i l Procedure Article 2. Louisiana has personal Jurisdiction over Defendant pursuant to
H ^1
Louisiana Code o f Civi l Procedure Article 6 and Louisiana Revised Statute 13:3201 A ( l ) and (2)
andB.
11.
Venue is proper and appropriate in the Parish o f Orleans pursuant to Louisiana Code o f
Civi l Procedure Articles 42,76.1, 78, and 79, among others.
F A C T U A L BACKGROUND
A. The Agreements
12.
On November 1, 1998, Carter and Cash Money entered into a written recording
agreement pursuant to which Carter agreed, inter alia, to provide exclusive recording services to
Cash Money (the "1998 Recording Agreement"). Pursuant to the 1998 Recording Agreement,
Cash Money agreed, inter alia, to render accountings and pay royalties to Carter on or before
September 30 wi th respect to the semi-annual period ending June 30 and on or before March 31
for the semi-annual period ending December 31 with respect to the sales by Cash Money o f
recordings delivered by Carter thereunder. The 1998 Recording Agreement contains various
provisions relating to royalties and advances payable to Carter, product delivery obligations,
Carter's rights o f audit and option periods to extend the term thereof.
13.
On or about February 20, 2003, Carter and Cash Money entered into a self-styled
"Memorandum o f Agreement" (the "2003 Label Agreement") for the creation o f the Young
Money Label joint venture for the common purpose o f the manufacture, distribution, promotion
and exploitation o f recordings containing the performances o f new recording artists who would
be signed to the Young Money Label following approval by Carter and Cash Money, the sole
owners o f the joint venture.
14.
The 2003 Label Agreement provided that, inter alia, after the deduction o f a distribution
fee and costs, the profits o f the Young Money Label would be divided 51%-49% between Cash
Money and Carter and ownership o f all the Young Money Label property, (e.g., company
3
recordings, copyrights, intellectual property, good wi l l ) would be similarly owned, 51%-49%
between Cash Money and Carter, respectively.
15.
The 2003 Label Agreement also provided that the Young Money Label would use the
same manufacturer and the same distributer, Universal Music Group, Inc. ("Universal"), that
Cash Money uses for its own recordings (i.e., non-Young Money Label recordings). Cash
Money and Carter agreed that the Young Money Label would be charged the same net
distribution fee by Universal wi th respect to the Young Money Label recordings as Cash Money
was charged by Universal for Cash Money's own recordings.
16.
Subsequent to the execution o f the 1998 Recording Agreement and the 2003 Label
Agreement, various disputes arose between Cash Money and Carter. These disputes involved
issues between Carter and Cash Money relating to (i) recordings by Carter pursuant to the 1998
Recording Agreement and (i i ) Carter's interest in the Young Money Label joint venture. These
disputes resulted in a series o f settlement agreements and amendments, between Carter and Cash
Money, to the above referenced agreements.
17.
The first o f these was an agreement, dated January 20, 2005 (the "2005 Settlement
Agreement"). The 2005 Settlement Agreement amended the 1998 Recording Agreement by,
inter alia, extending the number o f option periods during which Carter would be obligated to
provide recordings embodying his individual recorded performances to Cash Money, fixing
recording costs and amending royalty rates payable to Carter. The terms o f the 1998 Recording
Agreement not expressly amended by the 2005 Settlement Agreement remained in full force and
effect.
18.
The 2005 Settlement Agreement also amended the 2003 Label Agreement by, inter alia,
extending the term thereof, amending the Young Money Label's service fee and providing Carter
wi th an advance against profits earned by the Young Money Label.
4
19.
By an agreement, dated July 24, 2006 (the "2006 Amendment"), between Carter and
Cash Money, the parties further amended the 1998 Recording Agreement and 2005 Settlement
Agreement by, inter alia, providing Carter wi th additional advances against royalties generated
in respect o f Carter's solo albums and by obligating Carter to perform on and deliver to Cash
Money two duet albums.
20.
The 2006 Amendment did not make any amendments to Carter's or Cash Money's rights
or obligations with respect to the Young Money Label.
21.
By agreement, dated June 5, 2008 (the "2008 Amendment"), Carter and Cash Money
again amended the prior agreements and amendments between Carter and Cash Money. Wi th
respect to Carter's individual recordings, the 2008 Amendment, inter alia, amended Carter's
album delivery requirement to Cash Money. More specifically, Carter and Cash Money agreed
that the album, "Tha Carter I I I , " would fulfi l l Carter's delivery requirements for the first option
period o f the 1998 Recording Agreement, as amended, and that Carter's future recording
obligation to Cash Money, wi th option periods, would be four (4) solo albums and a second duet
album.
22.
The 2008 Amendment also provided that Carter and Cash Money would joint ly own the
master recordings delivered by Carter in respect o f the albums delivered during the "fourth" and
"f i f th" option periods o f the 1998 Recording Agreement, as amended.
23.
The 2008 Amendment also amended Carter's and Cash Money's agreements relating to
the Young Money Label and extended the term o f the their joint venture for five years. The
2008 Amendment provided that Carter would be paid additional advances against profits for his
work with the Young Money Label and that Cash Money would provide certain payments to the
joint venture for overhead costs o f the Young Money Label. Cash Money further agreed to
5
maintain a One M i l l i o n Dollar ($1,000,000.00) escrow account to fund overhead payments and
recording funds for the Young Money Label.
24.
In the 2008 Amendment, Cash Money also agreed that the net profits due to Carter
pursuant to the 2003 Label Agreement, as amended, could not be cross-collateralized against any
monies that were unrecouped by Cash Money under the 1998 Recording Agreement, as
amended.
25.
The 2008 Amendment importantly provided that Cash Money would provide to Carter
the monthly accountings rendered by Universal, the Young Money Label's distributor, reflecting,
inter alia, the sales o f and other income derived from the Young Money Label recordings.
26.
After the execution o f the 2003 Label Agreement, Carter assigned all o f his rights and
interests, including any right to receive accountings and payment, in the Young Money Label to
Carter's wholly owned furnishing company, Young Money L L C .
27.
During the term o f the 2003 Label Agreement, as amended, the Young Money Label
signed the recording artist p/k/a "Drake."
28.
By virtue o f a letter agreement, dated June 26, 2009 (the "2009 Drake Letter
Agreement"), Young Money L L C and Cash Money agreed that Young Money LLC's share o f
the net profits earned in connection with any solo recordings released by Drake would not be
cross collateralized against any advances or other payments paid to Young Money L L C , or
Carter as its predecessor in interest, by Cash Money, pursuant to the 2003 Label Agreement, as
amended. Cash Money and Young Money L L C further agreed that Young Money L L C would be
entitled to one third o f the net profits earned by the Young Money Label in connection with the
recordings o f Drake released by the Young Money Label pursuant to the 2009 Drake Letter
Agreement.
6
29.
The 2009 Drake Letter Agreement also provided that Cash Money would account and
pay net profits to Young Money L L C and Aspire Records, on behalf o f Drake, on a monthly
basis.
30.
By an agreement, dated September 14, 2010, (the "2010 Amendment"), the parties
further amended the 1998 Recording Agreement and the 2003 Label Agreement, as previously
amended. However, the amendments made are not relevant to the events herein.
31.
By an agreement, dated Apr i l 5, 2012 (the "2012 Amendment"), Carter and Cash Money
further amended the 1998 Recording Agreement and the 2003 Label Agreements, as previously
amended. With regard to Carter's recording agreements, the 2012 Amendment provided that
Carter would grant Cash Money two (2) additional option periods and that his total remaining
recording obligation to Cash Money would be four (4) solo albums and an additional duet album.
32.
Pursuant to the 2012 Amendment, Cash Money agreed to pay Carter an advance o f Ten
Mi l l ion Dollars ($10,000,000.00) per solo album, with Eight Mi l l i on Dollars ($8,000,000.00) to
be paid upon the commencement o f the recording o f each solo album and the remaining Two
Mi l l i on Dollars ($2,000,000.00) to be paid upon delivery o f such album to Cash Money. Cash
Money also agreed to pay Carter fifty-percent (50%) o f its net receipts wi th regard to Carter's
solo albums.
33.
The 2012 Amendment further amended Cash Money's accounting obligation to Carter
and provided that Cash Money would account to Carter on a monthly basis for 49% o f the
Young Money Label's profits, at the same time and in the same manner as Cash Money's
distributor, Universal accounted to Cash Money. Cash Money further agreed that Carter's record
royalty account would be deemed recouped upon the commencement o f the sixth option period.
7
34.
Wi th regard to the Young Money Label, the 2012 Amendment extended the term o f the
2003 Label Agreement until June 4, 2015. Carter/Young Money L L C received an advance as
against the Young Money Label's net receipts. Cash Money also agreed to provide quarterly
overhead payments o f Two Hundred Thousand Dollar ($200,000.00).
35.
The 2012 Amendment also acknowledged that the copyrights in respect o f all master
recordings delivered under the 2003 Label Agreement would be registered as jo in t ly owned by
Cash Money and Young Money L L C .
B. Factual Events Giving Rise to the Instant Action
36.
For approximately the past four (4) years, numerous issues and disputes have arisen
between Cash Money and Carter, as a solo recording artist and with respect to Carter's and/or
Young Money LLC's interest in the Young Money Label. Such issues have culminated in the
past few months to give rise to the instant action.
37.
With regard to Carter's contractual relationship with Cash Money as a solo artist signed
to the Cash Money label, Cash Money has also failed to properly account to Carter and pay
royalties and advances to Carter pursuant to the 1998 Recording Agreement and the amendments
thereto.
38.
Despite being obligated to do so, as o f the date o f this Petition, Cash Money has not
registered Carter as a co-owner o f the sound recordings contained in the album entitled " I A m
Not a Human Being I I , " which was delivered for the fourth option period. Upon information and
belief, in breach o f the 2008 Amendment, Cash Money registered the copyright i n such sound
recordings solely in the name o f Cash Money.
39.
Carter, as both an individual artist and on behalf o f Young Money L L C , as a co-owner o f
the Young Money Label, has duly requested to audit the books and records o f Cash Money in
8
respect to the exploitation o f Carter's recordings covered by the 1998 Recording Agreement, as
amended and the recordings released by the Young Money Label pursuant to 2003 Label
Agreement, as amended. Cash Money has refused such demands as well as demands by Carter
and/or Young Money L L C for accountings in respect o f the financial operations o f their co-
owned joint venture, the Young Money Label.
40.
In early December, 2014, Carter attempted to deliver to Cash Money the sound
recordings comprising the second o f the solo albums, entitled "Tha Carter V , " provided for by
the 2012 Amendment. Although obligated to pay Carter Eight Mi l l i on Dollars ($8,000,000.00)
at the commencement o f the recording o f "Tha Carter V " and Two M i l l i o n Dollars
($2,000,000.00) upon delivery o f the album, Cash Money breached the 1998 Recording
Agreement, as amended, specifically by the 2012 Amendment, by failing to pay Carter the Eight
M i l l i on Dollar ($8,000,000.00) payment upon commencement o f the recording and paying
Carter only Two Mi l l i on Dollars ($2,000,000.00) over the course o f the recording o f "Tha Carter
V " . Moreover, Cash Money has refused to pay Carter the Two Mi l l i on Dollars ($2,000,000.00)
due upon delivery o f "Tha Carter V " to Cash Money. Cash Money has refused to pay Carter the
balance o f Eight Mi l l i on Dollars ($8,000,000.00) due Carter in respect o f "Tha Carter V " ,
despite due demand therefore by Carter.
41 .
Cash Money has not provided Carter wi th any contractual or statutory basis for failing to
pay the balance o f the advance for "Tha Carter V " and has given no assurances that it w i l l not
similarly refuse to pay Carter the Ten Mi l l i on Dollar ($10,000,000.00) advances due to h im for
each o f the next two (2) albums as required by the 2012 Amendment to the 1998 Recording
Agreement.
42.
Wi th regard to the Young Money Label, beginning at latest in 2013, Cash Money failed
to provide proper monthly accountings to Carter and/or Young Money L L C as required for the
Young Money Label and failed to make timely accounting and/or payments o f net profits due to
Carter and/or Young Money L L C pursuant the 2003 Label Agreement, as amended. In addition,
9
Cash Money failed to make the required overhead payments o f Two Hundred Thousand
($200,000.00) per calendar quarter to the Young Money Label and also failed to maintain the
escrow account funded wi th One M i l l i on Dollars ($1,000,000.00) for overhead payments for the
Young Money Label.
43.
Wi th regard to the 2009 Drake Letter Agreement, Cash Money, since at latest early 2012,
has failed to account to Young Money L L C on a monthly basis and has failed to pay Young
Money L L C its share o f net receipts wi th regard to solo recordings o f Drake released by the
Young Money Label. Cash Money has only provided intermittent, incomplete accountings
regarding Drake's recordings and has failed to provide a single complete accounting in respect o f
the exploitation o f the Drake recording, despite Drake being one o f the bestselling recording
artists in recent years.
44.
In summary, Cash Money has failed to properly account and pay royalties and profits to
Young Money L L C in respect o f the exploitation o f recordings owned and commercially
exploited by the Young Money Label. Cash Money has also failed to make overhead payments
and maintain the escrow fund as required by the 2003 Label Agreement and the amendments
thereto. Moreover, while required to obtain approval from Carter/Young Money L L C for
marketing expenses greater than Three Hundred Thousand Dollars ($300,000.00), Cash Money
failed to do so, and claims hundreds o f millions o f dollars in marketing expenses for the Young
Money Label.
45.
Cash Money also failed to properly register the copyright in the Young Money Label
recordings as joint ly owned by Cash Money and Carter/Young Money L L C . Cash Money
refused to accept artist's submitted by Carter to jo in the Young Money Label. Cash Money
failed to account and pay monies due to various third parties involved wi th recordings artists
signed to the Young Money Label. Such failures have resulted in legal actions against the
Young Money Label and/or Plaintiffs and additional financial losses for Plaintiffs.
10
46.
Along with failing to properly account to its partner, Cash Money has failed to pay
producers, engineers, and other third parties related to the operation o f the Young Money Label.
The Young Money Label has received numerous demands and claims against both i t and Cash
Money for such failures to account to and pay third parties.
47.
Cash Money has also been sued, along wi th the Young Money Label in some instances,
for failure to account to and pay royalties by numerous parties in connection wi th Young Money
Label artists. Some cases include: MFMNG Productions, LLC v. Cash Money, et al, 15-cv-
02948, (S.D.N.Y. Apr i l 15, 2015) (failure by Cash Money to pay sample license fees); The
Soundkillers, LLC v. Cash Money, et al, 14-cv-07980 (S.D.N.Y. October 2, 2014) (failure to pay
third party producers); Prince et al v. Cash Money Records, 14-cv-23057 (S.D. Fla. August 19,
2014) (failure to account and pay royalties to Drake's management).
48.
Such failures by Cash Money to properly account and pay producers, licensors, artists,
and other third parties are material breaches o f the 2003 Label Agreement, as amended. Such
actions have had a significant negative impact on both the Young Money Label and Carter, as an
individual, as it impacts their reputations within the industry.
49.
Upon information and belief, Cash Money has jeopardized the ability o f the Young
Money Label to properly and successfully conduct business and has improperly committed waste
to the assets o f the Young Money Label. Cash Money has failed to respond to numerous
demands for payment and has failed to appear and defend lawsuits filed against both the Young
Money Label and Cash Money for Cash Money's failure to account to and pay third parties,
which has, in some instances, resulted in default judgments.
50.
Upon information and belief, Cash Money failed to establish a separate bank account for
the Young Money Label and commingled funds belonging to the Young Money Label wi th Cash
11
Money's funds, including advances from Universal that were based upon the success o f Young
Money Label artists.
51.
Upon information and belief, Cash Money received approximately One Hundred M i l l i o n
($100,000,000.00) Dollars as an advance (the "Universal Advance") from Cash Money's
distributor, Universal, sometime in 2012. Despite the fact that much o f that money was received
based upon the popularity o f the Young Money Label's artists, Cash Money has never disclosed
the actual amount i t received from Universal nor any terms o f that deal to Plaintiffs, its joint
venture partner.
52.
Upon information and belief, Cash Money has, in violation o f its fiduciary duty to its
partner, commingled funds from the Universal Advance and other prior advances from Universal
and used portions o f such advances to pay Cash Money artists and/or expenses, when such
monies should have been used for the Young Money Label.
53.
Upon information and belief, the Universal Advance should have been sufficient for Cash
Money to meet its obligations wi th regard to the Young Money Label, especially given the fact
that the Young Money Label artists are among the most popular recording artists in the industry.
FIRST CAUSE O F ACTION (By Carter for Breach of Obligation)
54.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-53 o f the Petition
as i f fully set forth herein.
55.
This cause o f action, arising under Louisiana Civ i l Code Articles 1983-1987, is for
breach o f obligation including breach o f the covenant o f good faith performance o f an obligation.
12
56.
The 1998 Recording Agreement, as amended, constitutes a conventional obligation and a
binding agreement between Carter and Cash Money.
57.
Carter has fully performed any and all obligations required by him pursuant to the 1998
Recording Agreement, as amended.
58.
Cash Money breached the 1998 Recording Agreement, as amended, by, inter alia, (i)
failing to pay Carter Eight Mi l l i on Dollars ($8,000,000.00) for delivery o f "Tha Carter V " ; ( i i )
failing to properly account and pay royalties to Carter for monies earned by Carter's recordings;
( i i i ) prohibiting Carter from auditing the books and records o f Cash Money; and (iv) knowingly
failing to register the copyright o f the Carter recordings for the album " I A m Not a Human Being
I I " in both Cash Money's and Carter's names.
59.
Cash Money, through their aforementioned conduct, has breached its obligations and the
covenants o f good faith performance attendant thereto, in contravention o f Louisiana Civ i l Code
Article 1983.
60.
By virtue o f the above, Carter has been damaged in an amount not less than Eight Mi l l i on
Dollars ($8,000,000.00) wi th statutory interest from the date o f Cash Money's breaches and is
further entitled to recover all damages sustained pursuant to Louisiana Civ i l Code Article 1997.
SECOND CAUSE OF ACTION (By Carter/Young Money L L C for Breach of Obligation)
61.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-60 o f the Petition
as i f fully set forth herein.
13
62.
This Cause of Action, arising under Louisiana Civ i l Code Articles 1983-1987, is for
breach o f obligation including breach of the covenant o f good faith performance o f an obligation.
63.
The 2003 Label Agreement, as amended, constitutes a conventional obligation and a
binding agreement between Carter/Y oung Money L L C and Cash Money.
64.
Carter/Young Money L L C has fully performed any and all obligations required by the
2003 Label Agreement, as amended.
65.
Cash Money has breached the 2003 Label Agreement, as amended, by, inter alia, (i)
failing to make quarterly overhead payments for the Young Money Label; ( i i ) failing to maintain
One Mi l l i on Dollars ($1,000,000.00) in escrow for the benefit o f the Young Money Label to be
used for overhead payments and other costs; ( i i i ) failing to properly account to Carter/Y oung
Money L L C for income received from Young Money Label recordings; and (iv) failing to
account to its joint venture partner, Carter/Y oung Money L L C in respect o f the operations o f the
Young Money Label, and failing to pay to Carter/Young Money L L C monies shown to be due to
Carter/Y oung Money L L C by such accountings.
66.
Cash Money, through their aforementioned conduct, has breached its obligations and the
covenants o f good faith performance attendant thereto, in contravention o f Louisiana Civ i l Code
Article 1983.
67.
By virtue o f the above, Carter/Y oung Money L L C has been damaged in an amount to be
determined at trial and is further entitled to recover all damages sustained, pursuant to Louisiana
Civi l Code Articles 1997.
14
THIRD CAUSE OF ACTION (Breach of Fiduciary Duty)
68.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-67 o f the Petition,
as i f fully set forth herein.
69.
The 2003 Label Agreement, as amended, created a fiduciary duty on behalf o f Cash
Money to act in the best interests o f its joint venture partner, Carter/Y oung Money L L C wi th
regard to the operations o f the Young Money Label.
70.
This cause of action, arising under Louisiana Civ i l Code Articles 2808 - 2810, is for
breach o f fiduciary duty for activities prejudicial to the joint venture partnership.
71.
Cash Money breached its fiduciary duty by inter alia, (i) knowingly failing to register the
copyright o f the Young Money Label recordings in both Cash Money and Young Money L L C
and/or Carter's names; ( i i ) knowingly failing to properly account and pay royalties and profits
for the Young Money Label; ( i i i ) refusing to allow Plaintiffs to audit the books and records o f
Cash Money; ( iv) with regard to the Young Money Label, by failing to properly manage and
protect the interest o f Carter/Y oung Money L L C ; and, (v) wi th regard to the Young Money
Label, failing to account to and pay numerous third parties involved with the operation o f the
Young Money Label.
72.
By virtue o f the above, Plaintiffs have been damaged in an amount to be determined at
trial.
FOURTH CAUSE OF ACTION (Unjust Enrichment)
73.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-72 o f the Petition,
as i f fully set forth herein.
15
74.
This cause o f action, arising under Louisiana Civi l Code Articles 1757 and 2298, is for
unjust enrichment.
75.
By receiving and retaining some or all o f (i) Carter's share o f the monies due pursuant to
the 1998 Recording Agreement, as amended; and (i i) Carter/Young Money's share o f monies
due pursuant to the 2003 Label Agreement, as amended, Cash Money has been unjustly
enriched.
76.
To allow Cash Money to retain the benefit provided to it by Plaintiffs without
compensation would be unjust and inequitable because Cash Money w i l l have obtained an
enormous economic benefit at Plaintiffs' expense without having provided Plaintiffs wi th full
value in return for same.
77.
As a direct and proximate result o f the foregoing unjust enrichment, Plaintiffs have been
damaged in an amount to be determined at trial, but in no event less than Thirteen M i l l i o n
Dollars ($13,000,000.00).
F I F T H CAUSE OF ACTION (Accounting)
78.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-77 o f the Petition,
as i f fully set forth herein.
79.
Cash Money has continuously failed and refused to account or has provided inaccurate
and incomplete accountings to Plaintiffs for the exploitation o f Carter's recordings and the
Young Money Label's recordings.
80.
Upon a fair and accurate accounting by Cash Money to Plaintiffs, substantial sums o f
money w i l l be found to be due to Plaintiffs.
16
81.
Prior to the commencement o f this action, Plaintiffs duly demanded o f Cash Money an
accounting o f such moneys belonging to Plaintiffs. However, Cash Money failed, omitted and
refused to render and has never rendered such an accounting or paid such moneys in full to
Plaintiffs.
82.
Plaintiffs are entitled to specific performance o f this obligation and a fair and accurate
accounting by Cash Money.
SIXTH CAUSE OF ACTION (Anticipatory Breach of Contract)
83.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-82 o f the Petition,
as i f fully set forth herein.
84.
Pursuant to the 2012 Amendment to the 1998 Recording Agreement, Cash Money is to
pay Carter Ten Mi l l i on Dollars ($10,000,000.00) for each solo album that he delivers, wi th Eight
Mi l l i on Dollars ($8,000,000.00) payable upon the commencement o f the recording o f each
album and Two Mi l l i on Dollars ($2,000,000.00) payable upon delivery thereof.
85.
Pursuant to the 2003 Label Agreement, as amended, Cash Money is required to make
quarterly overhead payments o f Two Hundred Thousand Dollars ($200,000.00) for the Young
Money Label and to also maintain an escrow account wi th a balance o f One Mi l l i on Dollars
($1,000,000.00).
86.
Carter's ability to furnish solo albums is interdependently related upon the payment o f
the monies due to him. Similarly, Carter and/or Young Money LLC's ability to perform future
obligations under the 2003 Label Agreement, as amended, is interdependent upon receiving
payments for overhead costs so that the Young Money Label may continue to function.
17
87.
By failing to pay Carter the monies due to him for the recording and delivery o f the solo
album "Tha Carter V " , Cash Money has overtly, positively, and unequivocally communicated
that i t has repudiated its future obligations wi th regard to the 1998 Recording Agreement, as
amended. Based upon the foregoing, Carter's future obligations to perform pursuant to the 1998
Recording Agreement, as amended, would be fruitless and should be deemed terminated. See,
Fertel v. Brooks, 832 So. 2d 297, 305 (La. App. 4 Cir. Oct. 2, 2002).
88.
By failing to make overhead payments, failing to maintain an escrow account for the
Young Money Label, failing to pay necessary third parties, and by failing to accept artists that
Carter submits to jo in the Young Money Label, Cash Money has overtly, positively, and
unequivocally communicated that i t has repudiated its future obligations wi th regard to the 2003
Label Agreement, as amended. Based upon the foregoing, Carter/Young Money LLC's future
obligation to perform pursuant to the 2003 Label Agreement, as amended, would be fruitless and
should be deemed terminated.
89.
By virtue o f the above, Plaintiffs have been damaged in an amount to be determined at
trial, but not less than Twenty-Five Mi l l i on Dollars ($25,000,000.00).
SEVENTH CAUSE OF ACTION (Declaratory Judgment)
90.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-89 o f the Petition,
as i f fully set forth herein.
91.
Pursuant to the 2003 Label Agreement, as amended, Carter and/or Young Money L L C is
the joint owner and copyright claimant, along with Cash Money, o f all the Young Money Label
recordings.
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92.
Pursuant to the 1998 Recording Agreement, as amended, Carter is the joint owner o f the
all recordings delivered to Cash Money during the fourth and fifth option periods o f the
agreements. Accordingly, Carter is the co-owner o f the recordings and copyrights constituting
the album " I A m Not a Human Being I I " and "Tha Carter V . "
93.
Cash Money has failed to register Carter as the joint owner o f the copyright o f the album
" I A m Not a Human Being I I " and has failed to register Carter and/or Young Money L L C as the
joint owner o f any o f the Young Money Label recordings.
94.
There is now an actual, genuine and justiciable controversy between the parties that can
only be resolved by declaratory relief. In accordance with Louisiana Code o f Civ i l Procedure
Article 1872, Plaintiff is entitled to a declaration that (i) pursuant to the 2003 Label Agreement,
as amended, Carter and/or Young Money LLC has a 49% ownership in all the Young Money
Label recordings and joint ly owns the copyright o f all such recordings with Cash Money; and ( i i )
that Carter is the co-owner o f all the recordings delivered under the fourth and fifth option
periods o f the 1998 Recording Agreement, as amended, including, but not limited to the
recordings constituting the album " I A m Not a Human Being I I " and "Tha Carter V . "
E I G H T H CAUSE OF ACTION (CONVERSION)
95.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1 -94 o f the Petition,
as i f fully set forth herein.
96.
This cause o f action arises under Louisiana Civ i l Code Article 2315 and is grounded on
the Defendant's unlawful interference with Plaintiffs' ownership o f certain intellectual property.
See, DualDrillim Co. v. Mills Equip. Invs.. 721 So. 2d 853, 857 (La. Dec. 1. 1998).
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97.
Pursuant to the 2003 Label Agreement, as amended, Carter and/or Young Money L L C is
the joint owner and copyright claimant, along wi th Cash Money, o f all the Young Money Label
recordings.
98.
Pursuant to the 1998 Recording Agreement, as amended, Carter is the joint owner o f all
recordings delivered to Cash Money during the fourth and fifth option periods o f the agreements.
Accordingly, Carter is the co-owner o f the recordings and copyrights constituting the album " I
A m Not a Human Being I I " and "Tha Carter V . "
99.
By failing to register Plaintiffs as copyright owners o f the above-mentioned recordings,
Cash Money has interfered with and exercised unauthorized dominion over Plaintiffs' property,
in derogation o f Plaintiffs' rights.
100.
By virtue o f the foregoing, Plaintiffs have been damaged in an amount to be determined
at trial.
NINTH CAUSE OF ACTION
101.
Plaintiffs repeat and reallege the allegations contained in Paragraphs 1-100 o f the
Petition, as i f fully set forth herein.
102.
The Young Money Label joint venture, which is set to end on June 4, 2015, falls within
the concept o f a specific business undertaking resulting from the demonstrated intent o f two
or more persons to combine their efforts to carry out a single business venture for joint profit
as described in Louisiana Civ i l Code Article 2801 et seq. governing the creation and formation
of partnerships.
103.
Although joint ventures are analogous to partnerships and are largely governed by rules
20
applicable to partnerships, there are no specific codal provisions addressing legal remedies
available to Plaintiffs under the instant circumstances where Cash Money is causing irreparable
injury to the joint venture by committing acts o f fraud, breaches o f fiduciary duty, breaches o f
duty o f loyalty, refusing to allow Plaintiffs complete access to the operation o f the business,
refusing to render timely and proper accountings, and refusing to pay royalties and profits to
Young Money LLC.
104.
The provisions o f Louisiana Revised Statute 12:1-748, however, address circumstances
such as this in the context o f corporations and provide that after a full hearing, a court may
appoint a receiver in a proceeding by a shareholder where the shareholder establishes that
either: (1) the directors are deadlocked in the management o f the corporate affairs, the
shareholders are unable to break the deadlock and irreparable injury to the corporation is
threatened or being suffered; or (2) the directors or those in control o f the corporation are acting
fraudulently and irreparable injury to the corporation is threatened or being suffered.
105.
Further, this Honorable Court may issue injunctions, appoint a temporary receiver wi th
all the powers and duties the court directs, take other action to preserve the corporate assets
wherever located, and carry on the business o f the corporation until a full hearing is held. Id.
106.
In the alternative, Louisiana Civi l Code Article 2826 provides that (among other causes)
a partnership terminates upon a judgment o f termination or the impossibility o f attainment o f
the object o f the partnership. Unless there is an agreement to the contrary, a partnership is
liquidated in the same manner and according to the same rules that govern liquidation o f a
corporation. L A C I V . C O D E A R T . 2834.
107.
To that end, Louisiana Revised Statute 12:1-1431 likewise provides that a shareholder in
a proceeding brought to dissolve a corporation or continue a dissolution under court supervision
may appoint a receiver or liquidator with all powers and duties the court directs, take other
21
action required to preserve the corporate assets wherever located and carry on the business o f
the corporation until a full hearing can be held.
108.
In this particular case, i t is in the best interest o f the parties that either a temporary
receiver be appointed to supervise the operations o f the Young Money Label joint venture, or
in the alternative, the joint venture be terminated and a liquidator appointed for the following
reasons, to wit : the joint venture is set to end on June 4, 2015, Cash Money has failed to
properly account to Plaintiffs, failed to pay third parties for the Young Money Label's
operations, failed to maintain operating funds for the Young Money Label, refused Plaintiffs'
demands to audit the books and records relating to the Young Money Label, prevented
Plaintiffs from fulfilling their obligations under the 2003 Label Agreement, as amended,
breached their fiduciary duty to Plaintiffs, wasted the assets o f the Young Money Label, and
commingled the Young Money Label's funds with Cash Money's funds all o f which is causing
irreparable harm to Plaintiffs and the Young Money Label.
109.
These acts o f wrongdoing by Cash Money are verified by the affidavits o f Ronald E.
Sweeney, Cortez Bryant, and Dwayne Michael Carter, Jr. attached hereto as Exhibits A-C,
respectively.
110.
In light o f the foregoing factual allegations and the legal grounds for the appointment o f a
receiver or liquidator, the Plaintiffs request this Honorable Court, pending a Rule to Show
Cause Hearing, appoint a temporary receiver or temporary liquidator, qualified under the law
and suitable to this Honorable Court, and issue a preliminary injunction prohibiting, enjoining,
and preventing the named Defendant, Cash Money Records, Inc., and its officers, agents,
servants, employees and attorneys, and those persons in active concert or participation with
them, from further violations o f the joint venture agreement and the amendments thereto and
causing for the cease and desist o f activities that would be associated with operations except as
22
authorized by the temporary receiver or liquidator.
111.
Absent the issuance o f these extraordinary remedies by this Honorable Court, Plaintiffs
w i l l be exposed to ongoing losses o f rights or interests in assets, royalties and profits which
shall cause irreparable harm to Plaintiffs, and the Young Money Label. Although the law does
not require a showing o f exigency as a precondition to the appointment o f a temporary receiver
or a temporary liquidator, the immediate appointment o f a temporary liquidator or a temporary
receiver and issuance o f the requested preliminary injunction is nonetheless warranted because
o f the impending end o f the Young Money Label joint venture on June 4, 2015 and the need to
protect the assets o f Young Money Label prior to the termination o f the joint venture.
Consequently, as is demonstrated by the foregoing facts, it is in the best interest o f the Young
Money Label, Plaintiffs and the creditors o f Young Money Label that this matter be taken up
without delay; that named Defendant Cash Money Records, Inc. be issued a Rule to Show
Cause why a preliminary injunction should not be issued by this Honorable Court wi th minimal
bond from Plaintiffs; that named Defendant Cash Money Records, Inc. be issued a Rule to
Show Cause why a temporary liquidator or a temporary receiver should not be appointed by
this Honorable Court and that, after trial on the merits, a permanent injunction be issued and a
permanent liquidator or permanent receiver be appointed.
P R A Y E R FOR R E L I E F
WHEREFORE, Plaintiffs pray that Defendant be duly cited to answer this Petition, and
that after all due proceedings are had in connection herewith that there be judgment in their favor
against the Defendant for all damages allowable by law in each cause o f action as follows:
A . On the First Cause o f Action, for a monetary judgment against Defendant for all
damages sustained by Carter as result o f Defendant's breaches o f obligations and for all damages
pursuant to Louisiana Civ i l Code Article 1997 in an amount to be determined at trial, but in no
event less than Eight M i l l i o n Dollars ($8,000,000.00) with interest at the statutory rate from the
date o f Defendant's breaches;
23
B. On the Second Cause o f Action, for a monetary judgment against Defendant for
all damages sustained by Carter/Young Money L L C as result o f Defendant's breaches o f
obligations and for all damages pursuant to Louisiana Civ i l Code Article 1997 in an amount to
be determined at trial wi th interest at the statutory rate from the date o f Defendant's breaches;
C. On the Third Cause o f Action, for a monetary judgment against Defendant for all
damages sustained by Plaintiffs as result o f Defendant's breaches o f fiduciary duty pursuant to
Louisiana Civ i l Code Article 2808-2810 in an amount to be determined at trial wi th interest at
the statutory rate from the date o f Defendant's breaches;
D. On the Fourth Cause o f Action, for a monetary judgment against Defendant for all
damages sustained by Plaintiffs as result o f Defendant's unjust enrichment pursuant to
Louisiana Civ i l Code Articles 1757 and 2298 in an amount to be determined at trial, but in no
event less than Thirteen M i l l i o n Dollars ($13,000,000.00) wi th interest at the statutory rate from
the date o f Defendant's breaches;
E. On the Fifth Cause o f Action, a judgment requiring Defendant to render
accountings to Carter and Carter/Young Money;
F. On the Sixth Cause o f Action, for a monetary judgment against Defendant for all
damages sustained by Plaintiffs as result o f Defendant's anticipatory breaches o f contract in an
amount to be determined at trial, but in no event less than Twenty-Five M i l l i o n Dollars
($25,000,000.00) with interest at the statutory rate from the date o f Defendant's breaches;
G. On the Seventh Cause o f Action, for a declaratory judgment in accordance with
Louisiana Code o f Civ i l Procedure Article 1872 determining that Carter is the joint copyright
owner o f the recordings delivered for the fourth and fifth option periods o f the 1998 Recording
Agreement, as amended, and that Carter and/or Young Money LLC are/is the joint copyright
owner o f all o f the Young Money Label recordings;
H . On the Eighth Cause o f Action, for a monetary judgment against Defendant in an
amount to be determined at trial with interest at the statutory rate from the date o f Cash Money's
conversion; and
I . On the Ninth Cause o f Action, that after a Rule to Show Cause and upon the
furnishing o f security in an amount fixed by this Honorable Court, a preliminary injunction be
24
issued, a temporary receiver or a temporary liquidator be appointed, that the formal
appointment o f judicial receiver or liquidator be confirmed, that permanent injunction be issued
and that orders o f liquidation and dissolution follow in due course o f these proceedings.
J. Granting Plaintiffs such other and further relief as this Court deems just and
proper including the attorney's fees and costs o f this action.
WHEREFORE, Plaintiffs, Dwayne Michael Carter, Jr. and Young Money Entertainment,
LLC pray for trial by jury on their damage claims.
Dated: New Orleans, Louisiana May 29, 2015
Respectfully submitted:
PROVOSTY & GANKENDORFF, L L C
CHRISTOPHE B E L A SZAPARY (Bar # 25890) EDGAR D. GANKENDORFF (Bar #20550) K E E L I E M. BROOM (Bar# #33032) 650 Poydras Street, Suite 2700 New Orleans, Louisiana 70130 Telephone: (504)410-2795 Facsimile: (504)410-2796
Attorneys for Plaintiffs Young Money Entertainment, L L C and Dwayne Michael Carter, Jr.
P L E A S E S E R V E :
Cash Money Records, Inc. c/o Daniel Davillier, Esq 1010 Common Street, Suite 2510 New Orleans, L A 70112
Long Arm Statute
Cash Money Records, Inc. c/o Alan R. Friedman Fox Rothschild, L.L.P. 100 Park Avenue Suite 1500 New York, N Y 10017
25
V E R I F I C A T I O N
STATE OF Lulf^mt^ )
COUNTY OF l*iA*,Us ) ) ss.:
R O N A L D E. SWEENEY, being duly sworn, deposes and says:
I am an agent of the Plaintiffs in the action herein. I have read the foregoing Verified
Petition, know the contents thereof and the same are true to my knowledge, except as to those
matters therein which are stated to be alleged on information and belief, and as to those matters I
believe them to be true. J n
Ronald E. Sweeney.
Sworn to before me this ^ d a v of May 2015
My Comm. Expires Sep 26.2017t
KAMBIZ TANGESTANIFARt Commission # 2042963 t Notary Public - California 1
Los Angeles County
25
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS STATE OF LOUISIANA
NO DIVISION YOUNG MONEY ENTERTAINMENT, LLC and DWAYNE MICHAEL CARTER, JR.
RULE TO SHOW CAUSE ON PLAINTIFFS' PETITION FOR PRELIMINARY INJUNCTION AND APPOINTMENT OF A TEMPORARY RECEIVER OR
LIQUIDATOR
CONSIDERING Plaintiffs, Dwayne Michael Carter, Jr. and Young Money Entertainment, LLC's Verified Petition and supporting Affidavits:
IT IS ORDERED that Defendant, Cash Money Records, Inc., show cause on day
a) a Preliminary Injunction should not be issued herein prohibiting, enjoining, and preventing the named Defendant, Cash Money Records, Inc., and its officers, agents, servants, employees and attorneys, and those persons in active concert or participation with them, from violating the joint venture agreement of the Young Money Label and the amendments thereto and from carrying on activities that would be associated with operations of the Young Money Label; and
b) a temporary receiver or temporary liquidator should not be appointed herein with all the powers and duties this Honorable Court directs, to take actions to preserve the joint venture assets wherever located, and carry on the business of the Young Money Label joint venture. IT IS FURTHER ORDERED that the application in this matter is to be heard upon the
verified pleadings and/or supporting affidavits and a copy of this Order shall be served upon Defendant Cash Money Records, Inc. in conformity with La C.C.P. Article 3309.
IT IS FURTHER ORDERED that the applicants for theja^irrfin^yrmjunction and
VERSUS CASH MONEY RECORDS, INC.
FILED: DEPUTY CLERK
appointment of temporary liquidator or tempo; iceiyer .e ir &ffid; tpport of the
Cash Money Records, Inc. c/o Daniel Davillier, Esq 1010 Common Street, Suite 2510 New Orleans, LA 70112
Long Arm Statute Cash Money Records, Inc. c/o Alan R. Friedman Fox Rothschild, L.L.P. 100 Park Avenue Suite 1500 New York, NY 10017
V U is
28
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS STATE OF LOUISIANA
NO. 2015-5166 DIVISION A SECTION 15
YOUNG MONEY ENTERTAINMENT, LLC ET AL VERSUS
CASH MONEY RECORDS, INC. FILED:
DEPUTY CLERK ORDER
This matter will come before the Court for hearing on the 9 day of June, 2015 at 10:00 a.m. in Division A on an application for injunctive relief.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the application shall be heard upon the verified pleadings and/or supporting affidavits. A copy of this order shall be served upon defendants in conformity with La. Code Civ. Proc. Art. 3609.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the applicant for the preliminary injunction file and deliver to chambers their affidavits no later than Friday, June 5, 2015 at 12:00 p.m., and that the defendant in rule file and deliver to chambers their affidavits no later than Monday, June 8,2015 at 12:00 p.m.
NEW ORLEANS, LOUISIANA this 29m day of May 2015
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS - STATE OF LOUISIANA
NO. Q.OI$~ 5lb(* DIVISION " YOUNG MONEY ENTERTAINMENT, LLC and DWAYNE MICHAEL CARTER, JR.
VERSUS CASH MONEY RECORDS, INC.
FILED: DEPUTY CLERK
AFFIDAVIT OF RONALD E. SWEENEY STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) RONALD E. SWEENEY, known to me to be a person whose name is subscribed hereto,
being duly sworn deposes and says: 1. I am an attorney for Plaintiffs YOUNG MONEY ENTERTAINMENT, LLC
("Young Money LLC"), and DWAYNE MICHAEL CARTER, JR. ("Carter") p/k/a "Lil Wayne" and am fully familiar with all the facts and circumstances set forth herein.
2. I make this Affidavit in support of Plaintiffs' Petition for injunctive relief and for the appointment of a receiver or liquidator to protect Plaintiffs' interest in a joint venture with Defendant, CASH MONEY RECORDS, INC. ("Cash Money"), hereinafter referred to as the "Young Money Label", which is set to end by its own terms on June 4, 2015.
3. I have represented Carter and Young Money LLC in a transactional capacity since 2005 and have been intimately involved with Plaintiffs' relationship with Cash Money since that time.
THE PARTIES 4. Plaintiff, Dwayne Michael Carter, p/k/a "Lil Wayne" ("Carter") is an individual
with a principal residence in the State of Florida. As more particularly described in Carter's
accompanying affidavit, he has been for two decades an iconic hip-hop recording artist, songwriter and performer.
5. Plaintiff, Young Money LLC, is a limited liability company organized under the laws of the State of Delaware with a principal place of business in Miami, Florida. Carter is the sole member of Young Money LLC and holds Carter's interests in the joint venture, Young Money, with Defendant, Cash Money. Carter transferred his interest in the Young Money Label to Young Money LLC in the mid-2000s.
6. Upon information and belief Defendant, Cash Money, is a Louisiana corporation with its principal place of business in the State of Florida. Cash Money has for over twenty (20) years been engaged in the production of recordings embodying the performances of various hip hop artists, including the Plaintiff, Carter.
7. Cash Money was founded by brothers Bryan Williams ("B. Williams") and Ronald Williams ("R. Williams") in or around 1991.
8. Upon information and belief, B. Williams, p/k/a "Birdman" is the co-CEO of Cash Money with R. Williams and is also a hip-hop artist.
9. Upon information and belief, R. Williams, is the co-CEO of Cash Money with B. Williams.
10. The Young Money Label is a joint venture between Cash Money and Carter which began in 2003. The Young Money Label has been engaged in the production of recordings embodying the performance of artists signed to the Young Money Label through the efforts of Carter, with Cash Money having the financial responsibilities relating to the joint venture.
FACTUAL BACKGROUND 11. On November 1,1998, Carter and Cash Money entered into a written recording
agreement pursuant to which Carter agreed, inter alia, to provide exclusive recording services to Cash Money (the "1998 Recording Agreement") (A copy of the 1998 Recording Agreement is annexed hereto as Exhibit "A"). Pursuant to the 1998 Recording Agreement, Cash Money
2
agreed, inter alia, to render accountings and pay royalties to Carter on or before September 30 with respect to the semi-annual period ending June 30 and on or before March 31 for the semi-annual period ending December 31 with respect to the sales by Cash Money of recordings delivered by Carter thereunder. The 1998 Recording Agreement contains various provisions relating to royalties and advances payable to Carter, product delivery obligations, Carter's rights of audit and option periods to extend the term thereof.
12. On or about February 20, 2003, Carter and Cash Money entered into a self-styled "Memorandum of Agreement" (the "2003 Label Agreement") for the creation of the Young Money Label joint venture for the common purpose of the manufacture, distribution, promotion and exploitation of recordings containing the performances of new recording artists who would be signed to the Young Money Label following approval by Carter and Cash Money, the sole owners of the joint venture. (A copy of the 2003 Label Agreement is annexed hereto as Exhibit "B").
13. The 2003 Label Agreement provided that, inter alia, after the deduction of distribution fees and costs, the profits of the Young Money Label would be divided 51%-49% between Cash Money and Carter and ownership of all the Young Money Label property, (e.g., company recordings, copyrights, intellectual property, good will) would be similarly owned, 51%-49% between Cash Money and Carter, respectively.
14. The 2003 Label Agreement also provided that the Young Money Label would use the same manufacturer and the same distributer, Universal Music Group, Inc. ("Universal"), that Cash Money uses for its own recordings (i.e., non-Young Money Label recordings). Cash Money and Carter agreed that the Young Money Label would be charged the same net distribution fee by Universal in respect of the Young Money Label recordings as Cash Money was charged by Universal for Cash Money's own recordings.
15. Essentially, the purpose of the Young Money Label was to use Carter's success and influence within the industry to attract and discover talent to sign with the Young Money Label. Carter would provide the creative and musical talent while Cash Money would provide the financial backing for the Young Money Label.
3
16. Subsequent to the execution of the 1998 Recording Agreement and the 2003 Label Agreement, various disputes arose between Cash Money and Carter. These disputes involved issues between Carter and Cash Money relating to (i) recordings by Carter pursuant to the 1998 Recording Agreement and (ii) Carter's interest in the Young Money Label joint venture. These disputes resulted in a series of settlement agreements and amendments between Carter and Cash Money.
17. The first of these was an agreement, dated January 20,2005 (the "2005 Settlement Agreement") (A copy of the 2005 Settlement Agreement is annexed hereto as Exhibit "C"). The 2005 Settlement Agreement amended the 1998 Recording Agreement by, inter alia, extending the number of option periods during which Carter would be obligated to provide recordings embodying his individual recorded performances to Cash Money, fixing recording costs and amending royalty rates payable to Carter. The terms of the 1998 Recording Agreement not expressly amended by the 2005 Settlement Agreement remained in full force and effect.
18. The 2005 Settlement Agreement also amended the 2003 Label Agreement by, inter alia, extending the term thereof, amending the Young Money Label's service fee and providing Carter with an advance against profits earned by the Young Money Label.
19. By an agreement, dated July 24, 2006 (the "2006 Amendment"), between Carter and Cash Money, the parties further amended the 1998 Recording Agreement and 2005 Settlement Agreement by, inter alia, providing Carter with additional advances against royalties generated in respect of Carter's solo albums and by obligating Carter to perform on and deliver to Cash Money two duet albums (A copy of the 2006 Amendment is annexed hereto as Exhibit "D"). The 2006 Amendment did not make any amendments to Carter's or Cash Money's rights or obligations with respect to the Young Money Label.
20. By agreement, dated June 5,2008 (the "2008 Amendment"), Carter and Cash Money again amended their prior agreements and amendments. (A copy of the 2008 Amendment is annexed hereto as Exhibit "E"). With respect to the 1998 Recording Agreement, as amended, relating to Carter's individual recordings, the 2008 Amendment, inter alia, amended Carter's album delivery requirement to Cash Money. More specifically, Carter and Cash Money agreed that the album, "Tha Carter III", would fulfill Carter's delivery requirements for the first option
4
period of the 1998 Recording Agreement, as amended, and that Carter's future recording obligation to Cash Money, with option periods, would be four (4) solo albums and a second duet album.
21. The 2008 Amendment also provided that Carter and Cash Money would jointly own the master recordings delivered by Carter with respect to the albums delivered during the "fourth" and "fifth" option periods of the 1998 Recording Agreement, as amended.
22. The 2008 Amendment also amended Carter's and Cash Money's agreements relating to the Young Money Label and extended the term of the their joint venture for five years. The 2008 Amendment further provided that Carter would be paid additional advances against profits for his work with the Young Money Label and that Cash Money would provide certain payments to the joint venture for overhead costs of the Young Money Label. Cash Money further agreed to maintain a One Million Dollar ($1,000,000.00) escrow account to fund overhead payments and recording funds for the Young Money Label.
23. In the 2008 Amendment, Cash Money also agreed that the net profits due to Carter pursuant to the 2003 Label Agreement, as amended, could not be cross-collateralized against any monies that were unrecouped by Cash Money under the 1998 Recording Agreement, as amended.
24. Moreover, the 2008 Amendment provided that Cash Money would provide to Carter the monthly accountings rendered by Universal, the Young Money Label's distributor, reflecting, inter alia, the sales of and other income derived from the Young Money Label's recordings.
25. After the execution of the 2003 Label Agreement, Carter assigned all of his rights and interests, including any right to receive accountings and payment, in the Young Money Label to Carter's wholly owned furnishing company, Young Money LLC.
26. During the term of the 2003 Label Agreement, as amended, the Young Money Label signed the recording artist p/k/a "Drake". By virtue of a letter agreement, dated June 26, 2009 (the "2009 Drake Letter Agreement"), Young Money LLC and Cash Money agreed that Young Money LLC's share of the net profits earned in connection with any solo recordings released by Drake would not be cross collateralized against any advances or other payments paid
5
to Young Money LLC, or Carter as its predecessor in interest, by Cash Money, pursuant to the 2003 Label Agreement, as amended. Cash Money and Young Money LLC further agreed that Young Money LLC would be entitled to one third of the net profits earned by the Young Money Label in connection with recordings of Drake released by the Young Money Label.
27. The 2009 Drake Letter Agreement also provided that Cash Money would account and pay net profits to Young Money LLC and Aspire Records, on behalf of Drake, on a monthly basis. (A copy of the 2009 Drake Letter Agreement is annexed hereto as Exhibit "F").
28. By an agreement, dated September 14,2010, (the "2010 Amendment"), the parties further amended the 1998 Recording Agreement and the 2003 Label Agreement, as previously amended. However, the amendments made are not relevant to the events herein.
29. By an agreement, dated April 5, 2012 (the "2012 Amendment"), Carter and Cash Money further amended the 1998 Recording Agreement and the 2003 Label Agreements, as previously amended. With regard to Carter's recording agreements, the 2012 Amendment provided that Carter would grant Cash Money two (2) additional option periods and that his total remaining recording obligation to Cash Money would be four (4) solo albums and an additional duet album. (A copy of the 2012 Amendment is annexed hereto as Exhibit "G").
30. Pursuant to the 2012 Amendment, Cash Money agreed to pay Carter an advance of Ten Million Dollars ($10,000,000.00) per solo album, with Eight Million Dollars ($8,000,000.00) to be paid upon the commencement of the recording of each solo album and the remaining Two Million Dollars ($2,000,000.00) to be paid upon delivery of such album to Cash Money. Cash Money also agreed to pay Carter fifty-percent (50%) of its net receipts with regard to Carter's solo albums.
31. The 2012 Amendment further amended Cash Money's accounting obligation to Carter and provided that Cash Money would account to Carter on a monthly basis for 49% of the Young Money Label's profits, at the same time and in the same manner as Cash Money's distributor, Universal accounted to Cash Money. Cash Money further agreed that Carter's record royalty account would be deemed recouped upon the commencement of the sixth option period.
32. With regard to the Young Money Label, the 2012 Amendment extended the term of the 2003 Label Agreement until June 4,2015. Carter/Y oung Money LLC received an
6
advance as against the Young Money Label's net receipts. Cash Money also agreed to provide quarterly overhead payments of Two Hundred Thousand Dollar ($200,000.00) to the Young Money Label.
33. The 2012 Amendment also acknowledged that the copyrights in respect of all master recordings delivered under the 2003 Label Agreement would be registered as jointly owned by Cash Money and Young Money LLC. Finally, any single marketing expense by Cash Money on behalf of the Young Money Label that cost over Three Hundred Thousand ($300,000.00) Dollars could not be recouped against the Young Money Label unless previously approved in writing by myself or another approved Young Money representative.
IN SUPPORT OF THE PETITION 34. For approximately the past four (4) years, numerous issues and disputes have
arisen between Cash Money and Carter, as a solo recording artist and with respect to Carter's and/or Young Money LLC's interest in the Young Money Label. As will be shown herein, the necessity of a receiver or liquidator cannot be overstated as the term of the Young Money Label is set to end on June 4, 2015. Moreover, although not required for showing the necessity of a receiver or liquidator in this action, Cash Money's actions in relationship to Carter as a solo recording artist are relevant as they highlight and reinforce Carter's and/or Young Money LLC's firm belief that a receiver or liquidator is necessary for the Young Money Label and will also be discussed below.
3 5. Beginning at the latest in 2013, Cash Money failed to provide proper monthly accountings to Carter and/or Young Money LLC, as required for the Young Money Label, and failed to make timely accounting and/or payments of net profits due to Carter and/or Young Money LLC pursuant the 2003 Label Agreement, as amended. In addition, Cash Money failed to make the required overhead payments of Two Hundred Thousand ($200,000.00) per calendar quarter to the Young Money Label and also failed to maintain the escrow account funded with One Million Dollars ($1,000,000.00) for overhead payments for the Young Money Label.
36. Based upon its failures to properly fund the Young Money Label, Cash Money also failed to pay various producers, engineers, and other professionals that are necessary to
7
record studio albums for the Young Money Label's recording artists. As a result of such failures, numerous claims have been asserted against the Young Money Label and/or Cash Money.
37. With regard to accountings, the last accounting statement that the Young Money Label received from Cash Money was in February, 2014. However, the Young Money Label did not receive accountings for many periods before such accounting and the accounting rendered in February, 2014 was incomplete and improper. The accounting only provided for sales and provided no back-up for purported costs and other categories of expenses. For example, Cash Money claimed Thirty-Two Million ($32,000,000.00) Dollars in marketing expenses, yet failed to provide a single shred of documentation evidencing such expenses.
38. With regard to accountings relating to Drake, one of the most popular artists in recent years, the last accounting the Young Money Label received was for the period April 30, 2011. Such a failure by Cash Money to account to its partner is unconscionable.
39. Plaintiffs have made numerous demands for accountings and audits of Cash Money's books and records but such demands have been refused by Cash Money.
40. More importantly, upon information and belief, Cash Money received approximately One Hundred Million ($100,000,000.00) Dollars as an advance (the "Universal Advance") from Cash Money's distributor, Universal, sometime in 2012. Despite the fact that much of that money was received based upon the popularity of the Young Money Label's artists, Cash Money has never disclosed the actual amount it received from Universal nor any terms of that deal to its joint venture partner.
41. Moreover, upon information and belief, Cash Money has, in violation of its fiduciary duty to its partner, commingled funds from the Universal Advance and other prior advances and used portions of that advance to pay Cash Money artists and/or expenses, when such monies should have been used for the Young Money Label.
42. Along with failing to account to its partner, Cash Money has not been paying producers, engineers and other fees necessary to operate a record label. My office, on behalf of the Young Money Label, has received dozens of breach letters over the past year and a half because of Cash Money's failure to pay third parties. Below are some examples of the numerous breach claims my office has received.
8
43. Annexed hereto as Exhibit "H" is a letter, dated April 25, 2014 from Artist Royalty Service to the Young Money Label and Cash Money regarding Cash Money's failure to account to and pay numerous producers and publishers on various Young Money Label recordings.
44. Annexed hereto as Exhibit "I" is a letter, dated June 16, 2014, from Sony Music Entertainment to the Young Money Label and Cash Money regarding Cash Money and the Young Money's label purported breaches of sample license agreements. Cash Money, pursuant to the 2003 Label Agreement, was required to pay for such samples.
45. Annexed hereto as Exhibit "J" is a letter, dated June 30, 2014, from Frozen Moments LLC to the Young Money Label and Cash Money regarding Cash Money's failure to properly account and pay royalties to Drake.
46. Annexed hereto as Exhibit "K" is a letter, dated July 3, 2014, from B.I.G.F.A.C.E. Entertainment to the Young Money Label and Cash Money regarding Cash Money's failure to account to and pay a producer on two Young Money Label master recordings.
47. Annexed hereto as Exhibit "L" is a claim letter, dated March 4, 2015, from the Young Money Label artist Michael Stevenson p/k/a "Tyga" regarding Cash Money's failure to adhere to the payment agreement for recording costs.
48. Recently, my office, on behalf of the Young Money Label, received a letter, dated April 15, 2015, from the attorneys for the recording artist professionally known as "Nicki Minaj." The letter claims that numerous, if not all, of the producers for Nicki Minaj's recordings have not been properly accounted to and paid by the Young Money Label. Once again, pursuant to the 2003 Label Agreement, as amended, Cash Money is required to render accountings and pay producers. The letter also enclosed numerous breach letters from the various producers that had not been paid. (A copy of the April 15, 2015 letter, with attachments, is annexed hereto as Exhibit "M").
49. My office also received another letter, dated April 22,2015 from Kasz Money, Inc. regarding the Young Money Label's failure to pay other producers for Nicki Minaj's recordings. Once again, pursuant to the 2003 Label Agreement, as amended, Cash Money is required to pay such producers.
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50. Cash Money has also been sued, along with the Young Money Label in some instances, for failure to account to and pay royalties by numerous parties in connection Young Money Label artists. Some cases include: MFMNG Productions, LLC v. Cash Money, et al, 15-cv-02948, (S.D.N.Y. April 15,2015) (failure by Cash Money to pay sample license fees); The Soundkillers, LLC v. Cash Money, et al, 14-cv-07980 (S.D.N.Y. October 2, 2014) (failure to pay third party producers); Prince et al v. Cash Money Records, 14-cv-23057 (S.D. Fla. August 19, 2014) (failure to account and pay royalties to Drake's management).1
51. These failures by Cash Money to properly account and pay producers, licensors, artists, and other third parties are material breaches of the 2003 Label Agreement, as amended. Such actions have had a significant negative impact on both the Young Money Label and Carter, as an individual, as it impacts their reputations within the industry.
52. Moreover, the very purpose of the joint venture was for Cash Money to provide the financial resources and for Carter to use his status as a wildly popular and successful recording artist to attract talent to the Young Money Label. Now that third parties know that Cash Money will not pay them, the Young Money Label can no longer attract top talent.
53. Such a situation recently transpired with regard to the recording artist professionally known as "Chanel West Coast", who the Young Money Label attempted to sign, but Cash Money unreasonably refused to sign off upon. Essentially, Cash Money has prevented Carter from performing his obligations pursuant to the 2003 Label Agreement, as amended.
54. Cash Money has also made other bad faith actions with regard to the Young Money Label. An essential element of the joint venture is that Cash Money and Carter/Y oung Money LLC own everything 51% and 49%, respectively. However, Cash Money has failed to properly register the copyright in the Young Money Label recordings as jointly owned by Cash Money and Carter/Y oung Money LLC and instead registered them solely in Cash Money's name. Such a failure shows a knowing intent to deceive Plaintiffs.
55. The above-listed actions conclusively show the bad faith actions of Cash Money as against its partner, Plaintiffs. The actions show clear evidence of: breach of fiduciary duty,
1 Cash Money has also been sued by its own artists and one such case has resulted in a default judgment against Cash Money. See Virgil v. Cash Money Records, Inc., 15-cv-00365 (E.D. Lou. 2015) (Cash Money artist "Turk" sued Cash Money for its failure to account and pay royalties).
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failure to maintain accurate records, failure and refusal to account, refusal of audits, failure to pay, gross waste and/or misapplication of assets, and preventing Plaintiffs from performing under the 2003 Label Agreement, as amended.
56. The damage that has been done to Plaintiffs and potential further damage that could result from Cash Money's acts cannot be overstated. Reputation and credibility are key in the music industry and in order to attract top talent and producers, such third parties need to know that they will be paid.
57. Finally, although the above actions certainly demonstrate the need for a receiver or liquidator for the Young Money Label, Cash Money's actions against Carter as an artist further show Cash Money's bad faith against its business partner.
58. Not surprisingly, Cash Money has failed to properly account to Carter and pay royalties and advances to Carter pursuant to the 1998 Recording Agreement and the amendments thereto.
59. Despite being obligated to do so, as of the date of this affidavit, Cash Money has not registered Carter as a co-owner of the sound recordings contained in the album entitled "I Am Not a Human Being II," which was delivered for the fourth option period. Upon information and belief, in breach of the 2008 Amendment, Cash Money registered the copyright in such sound recordings solely in the name of Cash Money.
60. Carter, as both an individual artist and on behalf of Young Money LLC, as a co-owner of the Young Money Label, has duly requested to audit the books and records of Cash Money in respect to the exploitation of Carter's recordings covered by the 1998 Recording Agreement, as amended, and the recordings released by the Young Money Label pursuant to 2003 Label Agreement, as amended. Cash Money has refused such demands as well as a demands by Carter and/or Young Money LLC for accountings in respect of the financial operations of their co-owned joint venture, the Young Money Label.
61. In early December, 2014, Carter attempted to deliver to Cash Money the sound recordings comprising the second of the solo albums, entitled "Tha Carter V", provided for by the 2012 Amendment. Although obligated to pay Carter Eight Million Dollars ($8,000,000.00) at the commencement of the recording of "Tha Carter V" and Two Million Dollars
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($2,000,000.00) upon delivery of the album, Cash Money breached the 1998 Recording Agreement as amended specifically by the 2012 Amendment, by failing to pay Carter the Eight Million Dollar ($8,000,000.00) payment upon commencement of the recording and paying Carter only Two Million Dollars ($2,000,000.00) over the course of the recording of "Tha Carter V". Moreover, Cash Money has refused to pay Carter the Two Million Dollars ($2,000,000.00) due upon delivery of "Tha Carter V" to Cash Money. Cash Money has refused to pay Carter the balance of Eight Million Dollars ($8,000,000.00) due Carter in respect of "Tha Carter V", despite due demand therefore by Carter.
62. Cash Money has not provided Carter with any contractual or statutory basis for failing to pay the balance of the advance for "Tha Carter V" and has given no assurances that it will not similarly refuse to pay Carter the Ten Million Dollar ($10,000,000.00) advances due to him for the next two (2) albums as required by the 2012 Amendment to the 1998 Recording Agreement.
63. Clearly, Cash Money has no intention of paying Carter as a solo artist, Carter/Y oung Money LLC as 49% co-owner of the Young Money Label, nor any of the expenses of the Young Money Label, including fees to artists and third parties. Accordingly, a receiver or liquidator is necessary to protect Carter/Y oung Money LLC's interest in the Young Money Label before it ends on June 4, 2015.
64. Indeed, with the impending end of the joint venture on June 4, 2015 a receiver or liquidator is needed to protect assets as Cash Money has shown that it is not a trustworthy business partner. Many of the Young Money Label's contracts with artists extend beyond the term of the joint venture, so the appointment of a receiver or liquidator is crucial to protect Plaintiffs' assets and prevent irreparable injury to the joint venture while the parties' rights going forward are determined.
65. The foregoing is true and accurate to the best of my recollection.
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Thereafter, Affiant says nothing further
Dated this day of /tyj 2015.
RONALD E. SWEENEY
Sworn to and Subscribed Before Me, Notary Public, this y^O day of 2015.
NOTARWUBLIC My Commission Expires: l/?*/'7
KAMBIZ TANGESTANIFAR Commission # 2042963 Notary Public - California i
1 NsSfep/' Los Angeles County 4 ^ i a B S ^ My Comm. Expires Sep 26,20171
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CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS STATE OF LOUISIANA
NO. DIVISION YOUNG MONEY ENTERTAINMENT, LLC and DWAYNE MICHAEL CARTER, JR.
VERSUS CASH MONEY RECORDS, INC.
COUNTY OF NEW YORK )
CORTEZ BRYANT, known to me to be the person whose name is subscribed hereto, being duly sworn deposes and says:
1. I am the Chief Operating Officer of YOUNG MONEY ENTERTAINMENT, LLC ("Young Money LLC"), and the manager for DWAYNE MICHAEL CARTER, JR. ("Carter") p/k/a "Lil Wayne". As such, I am fully familiar with all the facts and circumstances set forth herein.
2. I make this Affidavit in support of Plaintiffs' Petition for injunctive relief and for the appointment of a receiver or liquidator to protect Plaintiffs' interests in Young Money, a joint venture with Defendant, CASH MONEY RECORDS, INC. ("Cash Money")1 hereinafter referred to as the "Young Money Label," which is set to expire by its own terms on June 4, 2015.
3. I began working as Carter's manager in 2004. Since that time, I have handled the day to day operations of the Young Money Label on behalf of Carter and/or Young Money LLC.
4. Since the late 1990s, Carter p/k/a Lil Wayne has been one of the most successful hip-hop recording artists in the world. Since he signed with Cash Money as a minor, he has been
FILED: DEPUTY CLERK
AFFIDAVIT OF CORTEZ BRYANT STATE OF NEW YORK )
) ss.:
FACTUAL BACKGROUND
Terms of art used herein shall have the meanings ascribed to them in the accompanying ^frljd'ay^ c ^ q n a h Sweeney (the "Sweeney Affidavit") submitted herewith. r* . t v
their flagship artist and has sold millions of records for the label. Lil Wayne has also been nominated for and won multiple Grammy's, Billboard Music Awards, American Music Awards, among countless other nominations and awards. Overall, Lil Wayne has been and is one of the most listened to recording artists in the world.
5. Lil Wayne was and is Cash Money's most successful artist by far and has been the main reason for much of the Cash Money label's success. Based upon this success, Cash Money and Carter agreed to found Young Money Label as a joint venture in 2003. Carter's popularity and success was the catalyst Cash Money could use to recruit artists to the Young Money Label.
6. The 2003 Label Agreement was structured to reflect such an arrangement. Carter was required to find new artists and submit them to the Young Money Label for approval by Cash Money. Essentially, Cash Money would provide the funding and distribution deal with Universal for the Young Money Label and Carter would use his popularity and success in the industry to attract and sign new talent.
7. Plaintiffs used Carter's status in the industry to attract numerous acts to the Young Money Label, many of which have been incredibly successful. Carter performed all of his obligations under the 2003 Label Agreement and signed numerous acts, including top artists such as Drake, Nicki Minaj, Tyga, Mack Maine, Lil Twist, and Christina Milian. Carter also signed numerous other successful artists to the Young Money Label.
8. The Court is respectfully referred to the Sweeney Affidavit, submitted herewith, for a full recitation of the numerous agreements between Plaintiffs and Cash Money.
9. As the Chief Operating Officer of the Young Money Label, I have witnessed the impact of Cash Money's numerous breaches and bad faith actions.
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10. As detailed in the Sweeney Affidavit, numerous claims have been made against the Young Money Label based upon Cash Money's failure to account to and pay third parties involved in the creation and promotion of the Young Money Label's artists' music.
11. Such breaches have had a very negative impact on the Young Money Label and Carter. Clearly, it is much harder to attract top talent to the Young Money Label when it is known throughout the industry that Cash Money is not living up to its obligation to pay artists and third parties on behalf of the Young Money Label.
12. The very purpose of the joint venture was for Cash Money to provide the financial resources and for Carter to use his status as a wildly popular and successful recording artist to attract talent to the Young Money Label. Now that third parties know that Cash Money will not pay them, the Young Money Label cannot attract top talent.
13. Cash Money has also failed to properly account to and pay Carter, as an individual artist, and the Young Money Label. Cash Money has only provided incomplete accountings that are not up to date and do not provide any back-up for claimed expenses and other charges.
14. Cash Money has also refused numerous demands for audits made by Plaintiffs, effectively freezing out its partner in the joint venture.
15. Pursuant to the 2003 Label Agreement, as amended, Plaintiffs are to deliver three albums per year for release by the Young Money Label. Cash Money has prevented Plaintiffs from fulfilling this obligation by not properly funding the Young Money Label and refusing to sign talented artists to the label that Carter has attempted to sign.
16. Such a situation recently transpired with regard to the recording artist professionally known as "Chanel West Coast", who the Young Money Label attempted to sign, but Cash Money unreasonably refused to sign off upon.
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17. As detailed more fully in the Sweeney Affidavit, Cash Money's failure to pay third parties and other actions have resulted in numerous claim letters and lawsuits being filed against the Young Money Label and Cash Money.
18. As detailed in the Sweeney Affidavit, upon information and belief, Cash Money received approximately One Hundred Million ($100,000,000.00) Dollars as an advance (the "Universal Advance") from Cash Money's distributor, Universal, sometime in 2012. Despite the fact that much of that money was received based upon the popularity of the Young Money Label's artists, Cash Money has never disclosed the actual amount it received from Universal nor any terms of that deal to its joint venture partner.
19. Moreover, upon information and belief, Cash Money has, in violation of its fiduciary duty to its partner, commingled funds from the Universal Advance and used portions of that advance to pay Cash Money artists and/or expenses, when such monies should have been used for the Young Money Label.
20. With regard to Carter as a solo artist signed to Cash Money, in early December, 2014, Carter attempted to deliver to Cash Money the sound recordings comprising the second of the solo albums, entitled "Tha Carter V", provided for by the 2012 Amendment. Although obligated to pay Carter Eight Million Dollars ($8,000,000.00) at the commencement of the recording of "Tha Carter V" and Two Million Dollars ($2,000,000.00) upon delivery of the album, Cash Money breached the 1998 Recording Agreement, as amended, specifically by the 2012 Amendment, by failing to pay Carter the Eight Million Dollar ($8,000,000.00) payment upon commencement of the recording and paying Carter only Two Million Dollars ($2,000,000.00) over the course of the recording of "Tha Carter V". Moreover, Cash Money has refused to pay Carter the Two Million Dollars ($2,000,000.00) due upon delivery of "Tha Carter V" to Cash Money. Cash Money has refused to pay Carter the balance of Eight Million Dollars ($8,000,000.00) due Carter in respect of "Tha Carter V", despite due demand therefore by Carter.
21. Cash Money has not provided Carter with any contractual or statutory basis for failing to pay the balance of the advance for "Tha Carter V" and has given no assurances that it will not similarly refuse to pay Carter the Ten Million Dollar ($10,000,000.00) advances due to him for the next two (2) albums as required by the 2012 Amendment to the 1998 Recording Agreement.
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22. The damage that has been done to Plaintiffs and potential further damage that could result from Cash Money's acts cannot be overstated. Reputation and credibility are key in the music industry and in order to attract top talent and producers, such third parties need to know that they will be paid.
23. More importantly, with the term of the joint venture ending on June 4, 2015 a receiver is needed to control the dissolution of the Young Money Label as Cash Money has shown on numerous occasion that it is not a trustworthy