Reznor: Manager Duped Me Into Bad Contract
Trent Reznor testified yesterday (May 16) against his longtime manager, saying he was stunned to learn in 2003 that despite millions of dollars in earnings by his band, Nine Inch Nails, he was left wiTrent Reznor testified yesterday (May 16) in New York against his longtime manager, saying he was stunned to learn in 2003 that despite millions of dollars in earnings by his band, Nine Inch Nails, he was left with as little as $400,000 in cash.
"I felt I had an accountant I couldn't trust," he said in his federal civil lawsuit against John Malm. Reznor contends that his former friend duped him into signing a contract that allowed Malm to collect 20 percent of the singer's gross earnings rather than net earnings.
A lawyer for Malm, Alan Hirth, said in an opening statement that his client worked many years for no salary and kept nothing secret from Reznor. "Of the millions upon millions upon millions that Trent Reznor and Nine Inch Nails made, the vast majority went into his [Reznor's] pocket," Hirth said.
Reznor testified he trusted Malm more than anyone in his life when he agreed to let him handle his finances in the 1980s as the band signed its first record contract. "John was the business guy, and I was the guy working for nothing in the studio," Reznor told jurors.
He said the pair created their own production company and managed sales of merchandise but the expenses piled up, draining large portions of the millions of dollars the band earned with its albums and concert tours. He admitted he ignored his finances and sometimes signed documents without reading or understanding them.
Reznor said he began to grow worried about finances when he was told during a meeting with Malm and a lawyer in 2002 that there was "cause for alarm."
The following year, he said, he asked Malm to tell him how much money he had. He said he was sent a financial statement that revealed he had at most $3 million in total assets and as little as $400,000 in cash.
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