MOG founder files suit, claims Beats fired him so they wouldn't have to pay compensation package

Shawn Knight

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mog beats lawsuit

MOG founder David Hyman has filed a lawsuit against Beats Electronics for more than $20 million according to a new report from The Wrap. The complaint stems from a compensation agreement that was signed when Beats acquired his company two years ago.

Hyman served as CEO of the online music service MOG from its inception in June 2005 until it was purchased by Beats Electronics seven years later for $14 million. The executive stuck around under an incentive plan in which he would be entitled to compensation of 2.5 percent of the company’s current outstanding equity interest with one percent due on the first year anniversary of employment. Further installments were to be paid over subsequent months.

What's more, Hyman’s suit claims he was promised a grant of 25 percent of the company’s outstanding equity interests if the company achieved a market value of $500 million or more.

Hyman was ousted after just seven months for attempting to terminate another employee. The lawsuit, however, claims he was actually fired from his position so Beats wouldn’t have to pay compensation as per the original acquisition agreement.

The news comes as Apple is expected to announce the purchase of Beats, perhaps as early as next week. Some will no doubt view the lawsuit as a money grab in light of Apple’s interest but it’ll ultimately be up to the courts to decide unless something can be worked out in the interim.

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Im not even close to a professional in this type of thing, but that seems like it might possibly be a not so wacky claim?

Came a bit late tho didnt it... 6months down line "Ah I am gonna sue beats! its been 6 months and I should probably make court case..."
 
I didn't know Beats bought MOG. With that in mind, the purchase of Beats makes a little more sense. From his point of view, he probably realized why they ousted him once the news about the Apple acquisition was announced. I do find it a bit amusing that Beats bought MOG, since they mostly catered to the streaming audiophile community, which isn't exactly Beats demographic.
 
Came a bit late tho didnt it... 6months down line "Ah I am gonna sue beats! its been 6 months and I should probably make court case..."
It could have been the guys lawyer dragging their feet. I can't say though, as I don't know any details. The time delay could also stem from new information that didn't surface until months later.
 
He was fired for terminating somebody... surely that must mean he literally murdered somebody because I don't see how someone in a management type role could be fired for firing someone. The article was non-specific about his role post acquisition. Is it too much to presume he retained some type of management position? Otherwise, I don't see any reason for somebody to be part of a company he sold if he didn't retain enough power to make it worth his time. It just seems fishy. I hope he has some hard proof though. It'll be circumstantial evidence mostly, I presume, and thats a tough sell.
 
Came a bit late tho didnt it... 6months down line "Ah I am gonna sue beats! its been 6 months and I should probably make court case..."
It could have been the guys lawyer dragging their feet. I can't say though, as I don't know any details. The time delay could also stem from new information that didn't surface until months later.

I can imagine it now in the court Judge: So why did you wait 6 months before you filed the lawsuit?, Mog founder: I was on vacation for 6 months and tbh I didnt know apple was interested in buying us so now they are I thought Heck why not lets sue them :D.
 
Im not even close to a professional in this type of thing, but that seems like it might possibly be a not so wacky claim?
I was just thinking the same thing. Maybe Cook will feel sorry for him when Apple buys Beats and fully recompenses him from the loose change in his pocket. :)
 
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