50 Cent (whose real name is Curtis James Jackson III) filed for bankruptcy last year after being nailed with a lawsuit seeking $5 million over a sex tape. Subject to approval by the Bankruptcy Court, Jackson appears to have secured $14.5 million that will help the “In Da Club” rapper satisfy some debts. The settlement is for what 50 says was a botched job by Garvey Schubert Barer (“GSB”), the law firm that represented him in a lawsuit against his former business partner, Sleek Audio (Jackson v. Garvey Schubert Barer, R. Bruce Beckner, Hillary H. Hughes, Je Jun Moon, and Paul Trinchero, No. 16 Civ. 5558 in the United States District Court for the Southern District of New York (the “District Court”)).
50 Cent began working with Sleek in 2010 after he saw his buddy Dr. Dre killing it with the Beats headphones. 50’s goal was to partner up with Sleek to create a new headphone called "Sleek by 50." The venture between 50 and Sleek went bust, and Jackson then formed SMS audio. Garvey Schubert Barer assured 50 that he could produce and release his SMS headphones without infringing on Sleek’s IP. Turns out GSB was wrong, and Sleek was awarded $16 million for misappropriation of trade secrets. The judge believed that 50 used Sleek’s trade secrets to launch SMS, which once sold almost $200,000 in headphones in 9 minutes on QVC.
Jackson, in his case against GSB, blamed the law firm for the Sleek court loss. The court documents state:
Among GSB’s numerous failures was its inexplicable decision not to call technical and damages experts to rebut expert testimony offered by Sleek — failures relied upon by the arbitrator in crediting Sleek’s experts and entering an eight-figure award in Sleek’s favor.
GSB released this statement when Jackson first hit them with the lawsuit:
We understand that Mr. Jackson is disappointed in the outcome of Sleek Audio’s arbitration against him…However, Mr. Jackson’s complaint against GSB omits a number of relevant facts and misstates a number of others, and we will respond to the allegations in accordance with the court’s rules. Our attorneys properly counseled Mr. Jackson and his sophisticated team of financial and operational advisors about the transactions and the arbitrations with Sleek. Unfortunately, the arbitrator in the Sleek case found Mr. Jackson responsible for his actions and the actions of those who performed services for him or his companies. We look forward to demonstrating that our attorneys handled the Sleek matters appropriately in all aspects.
Well, a little over a year later, something must have caused GSB to settle. Sometimes defendants settle if they feel a protracted legal battle could end in a loss. It costs money to defend a suit and GSB could have been responsible for Jackson’s attorneys’ fees in a loss.
Some of the terms of the settlement agreement include GSB forking over the almost $15 million with no admission of liability; neither party can disparage the other; Jackson can go after GSB for attorneys’ fees if the law firm defaults; and GSB must return to Jackson all client files pertaining to G-Unit Records, Inc., GUnit Brands, Inc., and SMS Audio, LLC.
Jackson still owes his creditors (including Sleek Audio) over $20 million so this money will never enter 50’s pockets.
Bill collectors keep comin’…to get money, money
- 50 Cent, "Money"
