NFTs (non-fungible tokens) have quickly become an important revenue and investment generator in the music industry this year.
In the past three months alone, we’ve seen NFT platforms like Ditto’s Opulous and Jay-Z-backed Bitski raise millions of dollars in funding.
Jay-Z made headlines again this week related to NFT, but for different reasons.
Roc-A-Fella Records, the label co-founded by Shawn Carter in 1994, is suing a co-founder, Damon Dash, for alleged intent to sell part of Jay-Z’s debut album Album Reasonable Doubt as NFT.
According to the lawsuit, filed in New York on Friday (June 18) and first reported by TMZ, Dash planned to partner with NFT platform SuperFarm to hold an online copyright auction on Wednesday (June 23) Reasonable doubt to host.
The lawsuit, which only names Roc-A-Fella (RAF Inc) and Dash as plaintiffs and defendants, respectively, says the auction has been canceled and Dash is “currently desperately looking for another place to sell”.
It adds, “It’s not about whether [Dash sells the NFT], only if. But Dash doesn’t even own Reasonable Doubt or its copyright and therefore has no right to sell the album or any rights to it.
“Instead, RAF, Inc. owns all rights to Reasonable Doubt. The sale of this irreplaceable asset must stop before it is too late and Dash must be held accountable for his theft. “
According to the allegation, RAF, Inc., incorporated in New York on January 8, 1996, “owns the copyright and all rights, title, and interest in and in Reasonable Doubt, including, without limitation, the right to sell, record, the album reproduce, broadcast, broadcast, exhibit, disseminate, advertise and exploit ”.
As explained in the legal document, Jay-Z (Shawn Carter), Dash, and Roc-A-Fella co-founder Kareem ‘Biggs’ Burke each own a third of RAF Inc.
The lawsuit alleges that Dash’s “status” [as] a minority shareholder of RAF, Inc. does not give him the right to sell any company value “(ie, the copyright to Reasonable Doubt).”
It adds, “The bottom line is simple: Dash can’t sell what he doesn’t own. In attempting such a sale, Dash has converted corporate value and violated its fiduciary duties.
The wording of the lawsuit, which you can read in full here, then becomes more serious, namely that Diehs “planned auction of Reasonable Doubt would lead to irreparable damage”.
It goes on to denounce Dash of the “shameless theft of RAF, Inc.’s most valuable assets” to accuse.
RAF. Inc seeks to “prohibit” the “sale of shares in reasonable doubt” and to award damages “at an amount that will be determined in the process.”
“There’s nothing in our agreement between us that prevents me or Jay Z from selling our stake in Roc A Fella Records, Inc., the company that owns Reasonable Doubt.”
However, in an exclusive statement to MBW, Dash shot back.
He calls the Roc-A-Fella lawsuit “Without merit” and would like to make it clear that he does not sell the entire album as NFT, but “a third of the shares I own through my one third ownership of Roc A Fella Records”.
Dash argues, “There’s nothing in our agreement between us that prevents me or Jay Z from selling our stake in Roc A Fella Records, Inc., the company that owns Reasonable Doubt.”
In addition, Dash claims that “this type of transaction takes place every day ”.
Dash claims Jay Z even tried to buy his one-third stake in Roc-A-Fella back in March this year, but Dash turned down the offer.
He also states that a deal with a prospective buyer would result in that buyer receiving Dash’s interest only in Roc-A-Fella Records and that “Jay Z will have the exclusive management rights.”
Dash says this was done “to prevent a buyer from getting Jay Z. disturbs[‘s] Exploitation of the rights ”.
You can read Damon Dash’s statement in full below:
The lawsuit is factually incorrect. I’m not selling the entire Reasonable Doubt album as a NFT, I am selling my 1/3 stake that I own through my 1/3 ownership to Roc a Fella Records.
me, along with Jay-Z and Biggs own equal shares of the Reasonable Doubt album, artwork and videos as we own equal shares, Roc a Fella records, Inc., whose only assets are the Reasonable Doubt album, artwork, videos, and underlying copyrights.
Reasonable Doubt was the first album to be released by Roc a Fella Records. We are all very proud of his success and the successful start of Jay Z’s career.
There is nothing in our agreement between us that prevents me or Jay Z from selling our stake in Roc A Fella Records, Inc., the company that owns Reasonable Doubt.
This type of transaction takes place on a daily basis. Not until March of this year Jay-Z offered to buy my third share at a price I thought was unacceptable.
I turned the offer down, and like any other valuable music owner, I looked into the possibility of a sale and decided to sell my one-third of the company’s shares, which includes my stake in the copyright as an NFT.
This lawsuit is unfounded, misrepresents the facts, and is an attempt to prevent me from selling something that I have the legal right to sell to. My transaction does not include Jay or Biggs property rights.
Under the terms of the deal with a prospective buyer, the buyer would buy my stake in Roc A Fella Records and Jay Z will have exclusive management rights. This was done to prevent a buyer from bothering Jay Z ‘.[s] Exploitation of the rights. Music business worldwide