Monster CEO Sues Beats Co-Founders Dr. Dre & Jimmy Iovine Over $3Billion Sale To Apple

The CEO of technology firm Monster is suing Beats Electronics and its co-founders Dr Dre and Jimmy Iovine for allegedly duping him before selling the headphone company to Apple for $3billion.

In the complaint, filed in a California court on Tuesday, Noel Lee, who also founded the video and audio cable maker, accuses rapper Dr Dre and record producer Mr Iovine of double crossing him.

Mr Lee - who once held a 5 percent stake in Beats via a Monster-Beats partnership that ended in 2012 - claims the pair deliberately orchestrated a 'sham' deal with smartphone maker HTC in 2011.

This deal, he says, led to the termination of the Monster alliance - he pared his stake in Beats to 1.25 per cent before selling his remaining holdings for $5.5 million in the autumn of 2013.

At the time, he was assured by Beats executives that there were no plans to sell the company for at least several years, he states in the lawsuit, which was filed in San Mateo Superior Court.

However, following Dr Dre's and Mr Iovine's alleged shady maneuvering, Beats announced its sale to Apple last May, enabling the pair to become executives at the iPhone and iPad maker.

Had he held on to his 1.25 percent stake, Mr Lee would have received more than $30 million in the Apple deal. His original 5 percent stake would have been worth roughly $150 million.

Both Dr Dre, whose real name is Andre Young, and Mr Iovine, a longtime recording industry executive, reaped the biggest jackpots in the Apple deal.

However, the precise size of their windfalls has not been disclosed. In his lawsuit, Mr Lee states the pair each owned 15 percent stakes in the early stages of the Beats partnership.

Besides Dr Dre and Mr Iovine, the lawsuit targets HTC America Holding Ltd. and Paul Wachter, a Beats investor and board member.

In Mr Lee's case, he appears to be interested in recovering the money that he believes he lost through the alleged misconduct of Dr Dre and Mr Iovine.

The lawsuit also depicts the executive as the brains behind the Beats By Dre headphones, while casting Dr Dre and Mr Iovine as little more than figureheads.

One section of the lawsuit likens Mr Lee to two more famous innovators, Apple co-founder Steve Wozniak and sound-system pioneer Ray Dolby.

SOURCE