Lil Durk has been accused of defrauding a Startup company that claims that he sold them the rights to songs but that another company already had ownership.
The company Exceed Talent Capital filed a lawsuit this week claiming that it had an agreement to hold “Bedtime” in a fractional investment vehicle. However, the song was already owned exclusively by Alamo Records.
Back in April, Lil Durk announced that a portion of the royalties from “Bed Time,” which features his OTF member Doodie Lo, would be held by his nonprofit organization, Neighborhood Heroes, and it was to be used as an asset to the charity.
Exceed Talent Capital was tapped to allow listeners to own shares of the music from his OTF label, starting with the aforementioned “Bed Time.”
At the time, Lil Durk revealed that he wanted to make music rights investing accessible, especially to his fans who could buy shares in future music royalties generated from the song.
Now, Exceed is claiming that Durk signed deals with two different entities for rights to the song, and they were defrauded.
The lawsuit Wednesday at the Manhattan federal court claimed that Sony’s Alamo Records owned the rights to the song, although Durk signed an agreement with them.
“Despite defendants’ unambiguous contractual representations and warranties regarding their rights in the Banks recording, Exceed has now learned that Banks previously had assigned to a third party the exact same rights,” the lawsuit said.
The lawsuit also claimed that the breach of the agreement caused Exceed more than $12 million in damages.
“As defendants have failed and refused to acknowledge any responsibility for their intentional misrepresentations and material contractual breaches, let alone take action to rectify the same, Exceed was compelled to bring the present action to obtain legal redress,” the company wrote.
The lawsuit also disclosed that Lil Durk, whose real name is Durk Derrick Banks, received an upfront payment of $600,000 for the recording rights to the track.
According to Billboard, the song’s ownership is contentious as Alamo issued a Cease and Desist after Durk’s announcement with Exceed over “Bed Time”.
The publication says Alamo has claimed to have exclusive rights over the song and that Durk did not have any right to sell his recording royalties to Exceed.
In the meantime, Exceed says Durk has been uncooperative in refunding monies paid as well as monies spent to get the deal approved by the Securities and Exchange Commission.
The company is also claiming unspecified damages for reputational damage after it had to refund investors and persons interested in the deal.
