Headphones Battles: Sometimes it’s best to just forget about Dre!


The lesson here: Sometimes it’s best to just forget about Dre.

But back in 2009, that wasn’t an easy task for fellow hip-hop artist 50 Cent, who watched as Dr. Dre raked it in with his Beats by Dre headphones. By the following year, 50 Cent thought, “I can do that,” a decision that has since cost him millions of dollars.

The artist, whose real name is Curtis James Jackson III, partnered with a company called Sleek Audio to make is own headphones called Sleek by 50. (Take that, Dre.)

The hip-hop artist invested more than $2 million in Sleek, according to court papers, but his branded headphones never hit the market. So Mr. Jackson abandoned the idea of partnering with Sleek and decided to make his own headphones—Street by 50—under a brand he called SMS Audio. And that is when Mr. Jackson got in legal hot water.

Unfortunately, the brand hit a little too close to home for Sleek. The company, which specializes in custom earbuds, sued Mr. Jackson for violating a brand-licensing agreement, among other things, ultimately resulting in a $17.2 million arbitration award against the rapper.

Now that Mr. Jackson has filed for bankruptcy, he says the whole fiasco is the fault of the lawyers who represented him in the deal. He says he should have been warned not to invest with Sleek and, after the deal fell apart, should have been advised that his SMS headphones would infringe on the Sleek deal.

Mr. Jackson’s lawyer said the rapper “became saddled with liabilities” exceeding $18 million, not including the millions he spent in legal fees.

“Mr. Jackson’s decision to file this action came only after it was determined that a settlement could not be reached between the parties,” said Craig Weiner, Mr. Jackson’s lawyer at the law firm Robins Kaplan.

Mr. Jackson said in court documents that his lawyers’ actions “rose to the level of malpractice.” He is seeking $25 million in actual damages and another $50 million in punitive damages.

In a statement to Bankruptcy Beat, law firm Garvey Schubert Barer responded to the allegations, saying the firm understands Mr. Jackson’s disappointment in the outcome of the Sleek arbitration. However, “our attorneys properly counseled Mr. Jackson and his sophisticated team of financial and operational advisors about the transactions and the arbitrations with Sleek,” a spokesman for the law firm said.


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