David Hyman, the founder of streaming music service MOG, has sued Beats Electronics for more than $20 million, claiming that Beats fired him to avoid giving him an equity payout, according to a report from Courthouse News Service.
News of the suit arrives as Apple is reportedly closing in on a deal to acquire Beats for $3.2 billion. Best known for its headphone and portable speaker business, Beats also operates streaming music service Beats Music, which stems from its acquisition of MOG in 2012.
MOG creator David Hyman, a serial entrepreneur who was also once CEO of Gracenote, claims in the suit that Beats dismissed him in bad faith, knowing that he would receive 2.5% of the company under an incentive plan based on the duration of his employment, according to the report. The suit names Daisy LLC as a co-defendant, the report said; Beats Music was code-named Project Daisy before its launch in January.