In House - The FindLaw Corporate Counsel Blog

Jay Z's Company Hit With Lawsuit Over Tidal Purchase

With the NBA playoffs underway, basketball fans often see Jay Z and wife Beyonce sitting courtside these days.

The billion dollar couple have the resources to fly on their $40 million jet from New York to California, with a stop-off on the way for Beyonce to slay Coachella. Of course, with great power comes great responsibility.

This week Jay Z has another lawsuit to look at: a Scandinavian law firm and a financial institution want almost $600,000 from a music deal. They say their fees were a done deal, too.

Tidal Deal

Jay Z's company bought Tidal, a streaming music service, for $56 million in 2015. In the New York lawsuit, the plaintiffs claim S. Carter Enterprises did not pay for services in the acquisition.

"Under the terms of their respective retention agreements with Carter Enterprises, Roschier and SEB performed valuable services for Carter Enterprises that helped bring the Tidal deal to fruition," the suit says.

The complaint says that Carter Enterprises has acknowledged the debt and promised to pay. It should be doable, given Tidal was valued at $600 million last year when Jay Z sold a third of it to Sprint for $200 million.

Of course, with great wealth comes great liability. The Securities and Exchange Commission, for example, wants to question Jay Z about his businesses.

"Celebrity Hunt"

His lawyers claim the SEC is on a "celebrity hunt" by demanding the rapper submit to unlimited questioning. The agency has said it is investigating the Iconix Brand Group to find out if securities laws were violated.

Jay Z sold his apparel brand Rocawear to Iconix for $204 million in 2007. It was a plot-twist in his rags to riches story because the rapper had pleaded guilty to assault in an incident that popularized his apparel.

"The hilarious thing," he wrote later, "if any of this can be considered funny, is that the Rocawear bubble coat I was wearing when they paraded me in front of the cameras started flying off the shelves the last three weeks before Christmas."

As for the SEC, he has agreed to a full-day of questioning. He may not make it to the basketball game that day.

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