Dre’s Day in Court - Black Enterprise
Black Enterprise Magazine September/October 2018 Issue

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Andre Young, better known as rapper-producer Dr. Dre, is seeking restitution for unpaid royalties, the reinstatement of his copyrights, and an injunction to keep Death Row Records Inc. from selling the rights of his 1992 album, The Chronic, to the highest bidder.

Death Row Records filed for Chapter 11 bankruptcy in April 2006. A court-appointed trustee has been attending to the company’s fiduciary responsibilities, which included determining whether to reorganize or dismantle the company by selling its music assets. Citing significant gaps in the labels financial records, the administrator concluded that selling the assets was more expedient.

Young surrendered his 50% ownership stake in the label as well as his right of rescission (or the unmaking of the contract) in 1996, when he signed an agreement with Death Row CEO Marion “Suge” Knight Jr. that relinquished his claims to copyrights for The Chronic in exchange for royalties. Reportedly, Young was paid $3 million, but Death Row later stopped the payments.

Young’s attorneys argue that this breach and Death Row’s distribution of the music without Young’s permission effectively defaulted the contract and that Young’s record masters and publishing rights should be returned to him. The court dismissed Young’s first suit in October 2007, but now the case is up for appeal. According to a court report, Young filed a claim against the Death Row estate in the amount of $8 million.

“What strikes me about these guys at Death Row Records is they were more sophisticated than people would think,” says David Pullman, founder, chairman, and CEO of the Pullman Group, L.L.C., an investment bank and specialty finance company servicing the entertainment and intellectual property industries. “Adding the language stating no rescission was smart. If you don’t expect to pay people royalties, then it is really smart.”

A hearing was scheduled for Feb. 26 in U.S. Bankruptcy Court in Los Angeles to approve the bidding procedures and the leading bid, made by Warner Music Group Corp. for $25 million. The money from the auction will allow Death Row Records to pay creditors who have already received a judgment against the company. They include a $1.1 million claim by the Internal Revenue Service and a judgment of $107 million awarded to Lydia Harris whose former husband Michael Harris claimed to finance the label in 1992. The latter also has a suit against the company for $117 million. Nearly another $50 million in other claims and litigations are still being resolved. This does not include a settlement agreement with Afeni Shakur, mother of the deceased rapper Tupac Shakur, who made an out of court settlement but reinstated her claim in the event that the settlement cannot be reached.

Precedent indicates that Young will likely win past royalties and royalties going forward, says Pullman. “No one disputes that he should get paid royalties. He did not give up those claims,” says Pullman. “[This suit] is a bargaining chip to make sure that the people who acquire the [music assets] understand that they have to deal with Young.

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.

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