Music streaming service MOG sues Beats Electronics

Posted May 17, 2014

MOG, a streaming music service founded by David Hyman, is suing Beats Electronics for over $20 million. Hyman said that Beats fired him so it could avoid giving him an equity payout. Beats acquired MOG in 2012 for an undisclosed amount and kept Hyman as CEO to oversee the MOG team. However, Hyman was fired within a year of the acquisition for trying to fire a specific employee.


The lawsuit claims Beats fired Hyman to avoid giving him the payout as well. Beats launched a music streaming service using MOG’s technology called Beats Music, which was launched in January. The lawsuit is taking place on the heels of rumors that Apple is preparing to buy Beats Electronics for $3.2 billion.

Hyman would likely miss a large cut of that acquisition since he lost his equity in MOG. The lawsuit says that Hyman would have been entitled to 2.5% of the company’s “currently outstanding equity interests” with 1% paid out after Hyman had been at the company for a year and the rest paid out over the next few months. The lawsuit also says that Hyman was promised 25% of the company’s outstanding equity interests if the company achieved a valuation of $500 million or more.