Back in 2008, Monster, the accessory company that deigns to charge $70 for “premium” HDMI cables, worked with Jimmy Iovine and Dr. Dre to produce a set of headphones under the nascent Beats by Dre line. Monster’s CEO had a stake in the company, which he held on to until early 2013 when he was led to believe that no “liquid” deal would be forthcoming.
Now, Monster is suing Beats Electronics, its founder, and HTC, for fraud over a deal that involved the Taiwanese manufacturer sell back a 25.5% stake of the company only months after it bought 51% of Beats in 2011. Monster’s CEO asserts that Beats engaged with HTC to go through with the deal to wrestle back control of the company through a change of ownership clause.
Monster CEO, Noel Lee, owned a 5% stake in Beats until just after the HTC deal, and in 2013 sold off his remaining share. He purports that if Beats hadn’t committed the reported fraud and Apple had gone through with its deal to purchase the headphone maker for $3.2 billion, his share would be worth well over $100 million.
The suit was filed in a California Superior Court, and it’s unclear how Beats, and its parent company Apple, will respond. This week at CES, Monster has a huge presence, bandying its new tagline, “More than a headphone company.”