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MOG founder sues Beats

By | Published on Monday 19 May 2014

Dvid Hyman

Ah, so this could be fun. The founder of one-time streaming service MOG is suing Beats Electronics in a $20 million lawsuit. Good times.

The Beats company bought the MOG streaming platform, an early provider of a Spotify-style service in the US market, in July 2012, it providing the foundations of the Beats Music set up that launched earlier this year. MOG founder David Hyman initially stayed on as CEO of the streaming business, but then exited somewhat abruptly the following November, with Topspin’s Ian Rogers subsequently being hired to lead Beats big play in the streaming space.

Although an official statement at the time said Hyman would continue to work as a ‘strategic advisor’ to Beats on streaming music matters, he implied he was going on an extended holiday after his speedy departure. He subsequently reappeared at a tech start up called earlier this year, though – according to a Billboard report last week – actually spent at least four months running Neil Young’s Pono service in between.

But the new lawsuit, reported on by the Courthouse News Service last week, suggests that Hyman’s 2012 exiting from Beats was not especially amicable. In his legal papers, Hyman claims that he was pushed out of the company in a bid to stop him from claiming shares in the Beats business that had been promised in the MOG acquisition, a commitment that would have started to kick in had he worked for the company for over a year.

It seems that a dispute over a “problematic” marketing executive led to Hyman’s ousting, though the MOG founder reckons that [a] he had been in his contractual rights to try and fire said marketing person and [b] the difficult marketeer was sent packing after his departure anyway. The implication is that the squabble over the marketing dude was just an excuse to get rid of Hyman before he could take his equity options.

Of course all this is of increased interest to Hyman given the rampant speculation about Apple buying the Beats business, including its streaming music subsidiary, in a possible $3.2 billion deal. Which would make the 2.5% of the Beats Music company Hyman claims was part of the MOG acquisition very much worth having.

Neither side has yet formally commented on the litigation.