1:06pm PT by Eriq Gardner
Suge Knight Accused of Taking Advantage of Drugged Scott Storch in Fraud Lawsuit
Scott Storch is still trying to get his life in order after burning through a $70 million fortune thanks to a cocaine addiction. The writer and producer of many hits including "Cry Me a River" by Justin Timberlake and "Naughty Girl" by Beyonce has been talking up another comeback after his previous attempt post-bankruptcy resulted in a lawsuit from those who had bankrolled him. Now, comes a new lawsuit from Storch's bankruptcy trustee looking to recover a royalty share to many of his compositions after Suge Knight of Death Row Records infamy allegedly coerced Storch to sell his stake in hit songs at a fraction of what they were worth.
What makes the fraud lawsuit filed in Florida bankruptcy court all the more intriguing is that one of Storch's greatest hits was Dr. Dre's "Still D.R.E." Obviously, Dre and Knight have history.
According to the complaint, Storch's life was in turmoil in 2010 thanks to his high-flying lifestyle and drug addiction. He needed money. So he sold his publisher's share of a music catalog for $2.3 million to Reservoir Media Management.
Scott Brown, a Chapter 7 Trustee, claims this establishes a "fair value benchmark" to the value of Storch's rights.
After the sale, Storch still had a writer's share of works. Through his agent, according to the complaint, he had been introduced to Parviz Omidvar, principal at Music Royalty Consulting, Inc. (MRCI), the defendant in the adversary action.
"On information and belief, Omidvar explained to the Debtor that: (a) he could get cash quickly from MRCI without having to wait to receive royalty payments; and (b) that such cash payments would be loans against his future royalty payments," states the complaint.
Storch allegedly decided against this, but later entertained selling his writer's share.
"At that time, Suge Knight lived in the same gated community in Los Angeles as [Storch]," continues the complaint. "Knight knew about the Debtor’s: (a) struggles with drug addiction; and (b) inability to properly manage his finances, which made the Debtor a vulnerable and attractive target for extortion and manipulation. Upon information and belief, Knight repeatedly and systematically intimidated and threatened the Debtor to obtain money."
Knight allegedly learned that Storch was actively engaged in discussions to sell his writer's share, and according to the complaint, went to Storch's home on April 9, 2012, and brought him to the offices of MRCI for a meeting with Omidvar.
"On information and belief," the suit continues, "Knight brought the Debtor to MRCI for at least two reasons: (i) Knight knew that MRCI would issue payment to the Debtor in a check that would be handed to the Debtor while Knight was present, ensuring Knight’s ability to intimidate, threaten and coerce the Debtor into immediately cashing the check and turning over more than half of the funds received to Knight; and (ii) Knight knew that MRCI would knowingly permit his extortion of the Debtor and/or refrain from taking any action to prevent it because MRCI benefitted from Knight’s intimidation of the Debtor by acquiring the Debtor’s future royalty stream for pennies on the dollar."
It's claimed that Storch, sleep-deprived and concerned for his safety, was then directed to sign documents without an attorney present, while he was under the influence of cocaine and alcohol. Storch was given a $5,000 check.
"On information and belief, consistent with his tacit agreement with Omidvar, Knight immediately threatened and intimidated the Debtor after they left MRCI’s offices, and then accompanied the Debtor to the bank to cash the check," states the complaint. "After the Debtor cashed the check from MRCI, Knight threatened and intimidated the Debtor into surrendering to Knight at least half of the cash received."
Knight is said to have again retrieved Storch from his home on two separate ocassions later that month to bring him back to MRCI's offices for additional paperwork. This time, the suit says that MRCI acquired all of Storch's writer's share not previously acquired.
"Following the April 26 meeting, Omidvar handed the Debtor a check in the amount of $58,000, which purportedly represented the balance of the Purchase Price owed to the Debtor pursuant to the MRCI ASCAP Agreement," continues the complaint. "On information and belief, Knight, consistent with his tacit agreement with Omidvar, once again immediately threatened and intimidated the Debtor after they left MRCI’s offices on April 26, 2012, and then accompanied the Debtor to the bank to cash the check for $58,000. After the Debtor cashed the check, Knight again threatened and intimidated the Debtor into surrendering to Knight at least half of the cash received."
This repeated itself. In total, according to the complaint, MRCI gave Storch 16 checks for a combined value of $419,306.20 with Knight then obtaining half "through a combination of threats and intimidation."
Brown is now claiming fraudulent transfers and seeking rescission because of duress, menace and undue influence. The trustee is represented by attorneys at Greenspoon Marder.