Lil Durk sued by fintech startup for $12m over alleged ‘fraud’

A New York-based fintech startup is suing Lil Durk for not less than USD $12 million, accusing the Chicago rapper, his enterprise supervisor and label of “manifest fraud” in a deal to promote the rights to Lil Durk’s observe Bedtime.

In a grievance filed with the US District Courtroom for the Southern District of New York on Wednesday (December 6), Exceed Expertise Capital says Lil Durk, his enterprise supervisor Andrew Bonsu and his label OTF agreed to promote the rights to Bedtime to Exceed, although Lil Durk has an unique contract with Sony Music Entertainment’s Alamo Information.

Exceed Expertise Capital says it “permits certified traders to immediately take part within the expertise and creator economic system” by promoting fractions of shares within the income streams from works created by “high-earning skills” in sports activities and leisure.

The corporate says in its grievance that it acquired the rights to Bedtime for $600,000, with the intention of constructing it accessible by its fractional investing infrastructure. Solely later did the corporate be taught that Lil Durk, whose given identify is Durk Derrick Banks, “beforehand had assigned to a 3rd get together the very same rights.”

Together with Lil Durk, the lawsuit names Bonsu and OTF as defendants, together with Bonsu’s firm, Solely The Household Leisure Inc., and music trade consultancy TTPMG, which Exceed says acted as an middleman within the association between Lil Durk and the fintech.

Exceed and Lil Durk announced the partnership last fall, beginning with providing followers a “Trenches All-Access Move,” a kind of NFT that supplied followers unique entry to a non-public Grand Theft Auto roleplay server custom-built by Lil Durk and his OTF Gaming firm.

On the time, the server had a waitlist of over 15,000. Followers had been provided speedy lifetime entry, restricted version in-game wearables, and first dibs on shares from proceeds of Bedtime.

“The place I’m from, few personal something,” Lil Durk mentioned on the time. “As The Voice of the Trenches and for my label OTF, I’m all the time on the lookout for methods to increase and provides again to my individuals. Exceed makes it doable for my followers to grow to be a part of my crew and share in our success collectively.”

Exceed says that in Might of 2023, the corporate “acquired a requirement letter from Alamo Information… advising Exceed that [Lil Durk] was signed to an unique recording settlement with Alamo and that neither defendants nor [music distributor] Empire possess any proper… to assign any curiosity within the income streams generated” by Bedtime.

Exceed’s grievance, which might be learn in full here, says the corporate was pressured to “cancel and withdraw the providing [of shares in Bedtime] – which Exceed had expended vital time, effort and monetary assets in registering with the SEC, guaranteeing compliance with SEC guidelines and laws and advertising and selling.”

It was additionally pressured to “return the funds that had been invested by third events within the providing, additional considerably damaging Exceed’s repute and relationships with its companions and traders.”

The… contractual representations and warranties [made in the contract with Exceed] had been recognized by defendants to be false on the time they had been made.”

Exceed Expertise Capital, in a authorized grievance 

Exceed says it “repeatedly demanded that defendants rectify their manifest contractual breaches, solely to be met with resounding silence.”

On the time, Exceed had already paid $450,000 of the $600,000 it was to pay the defendants below the contract, however the defendants “completely ignored Exceed’s entreaties and refused to refund to Exceed any portion of the [money] it had already paid.”

The corporate says it sustained not less than $12 million in damages on account of its failed take care of Lil Durk.

The grievance alleges that Lil Durk signed with Alamo Information effectively earlier than his take care of Exceed, that means that the “contractual representations and warranties [made in the contract with Exceed] had been recognized by defendants to be false on the time they had been made.”

Exceed is asking the courtroom to award compensatory damages “in an quantity to be decided at trial,” in addition to punitive damages and attorneys’ charges and “prices incurred on account of defendants’ misconduct.”

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Lil Durk rose to fame in 2013 together with his mixtape Signed to the Streets, after which he was signed to Def Jam Recordings, which launched his first two albums, Keep in mind My Title and Lil Durk 2X, in 2015 and 2016, respectively. Alamo is known as because the label for the entire six studio albums that Lil Durk has launched since then.

Lil Durk has been nominated 4 instances for a Grammy, together with most lately in for Greatest Melodic Rap Efficiency, for his observe All My Life that includes J. Cole, within the 2024 Grammys to be held in February.Music Enterprise Worldwide