A business partner is suing Atlanta rapper Young Jeezy and Def Jam Recordings, claiming the artist and prominent record label have failed to share millions of dollars in profits from hits he helped Jeezy produce and promote.
In a lawsuit filed recently in Fulton County Superior Court, Demetrius Ellerbee said he and Jeezy, whose real name is Jay Wayne Jenkins, founded Atlanta-based CTE Music in 2001 as equal partners and later signed with Def Jam to distribute the rising rap artist's music.
But despite the success of CTE, also known as Corporate Thugz Entertainment, Ellerbee has seen little of the millions of dollars in Def Jam advances and royalties paid to the company, according to Ellerbee's Atlanta attorney, Mario Breedlove.
Breedlove, who said Jeezy intentionally "misappropriated" company funds and redirected them into his personal accounts, said Ellerbee is owed at least $5 million, but the figure is much higher when royalties and interest are figured. He said he is still awaiting an accounting of all Def Jam payments to CTE Music to find out the exact amount his client is owed.
Efforts were being made Tuesday to get comment from Jeezy's Atlanta attorney Donald Woodard and attorneys for Def Jam.
"They were partners," Breedlove told The Atlanta Journal-Constitution on Tuesday. "They started the company together. They grew the company together. And he's entitled to one-half."
Making it big in the industry
The lawsuit provides a glimpse into the business side of the highly competitive hip hop and rap music industry, the struggles and triumphs when artists hit it big.
According to the lawsuit, Ellerbee and Jeezy met at a youth boot camp program at Fort Stewart near Hinesville in 1995. Ellerbee said they became best friends because of their mutual interest in the music industry and jointly formed Young Gunz Entertainment Inc., a music production and distribution company, in 1999.
Young Gunz, however, failed to attract artists they'd hope would make the company profitable, and the company was dissolved in 2002.
Before pulling the plug on Young Gunz, however, Ellerbee said he and Jeezy had also jointly formed CTE Music in 2001, according to the suit.
CTE Music also didn't attract the hip hop and rap artists the duo had hoped for, so the company focused solely on music produced by Jeezy, who was slowly making a name for himself. Ellerbee said the company hired producers and promoters and produced mixtapes that were sold cheaply or distributed freely in the "underground market" to get Jeezy's music circulated. Two mixtapes produced in 2003 and 2004 were Jeezy's "Streets is Watching" and "Trap or Die".
As Jeezy's star began to rise, record labels began knocking, the suit says, including Atlantic, Warner Bros. and Def Jam.
"At the time, Def Jam was the label to be on if you were an up-and-coming hip-hop artist," said Breedlove, the attorney.
Ellerbee's suit said CTE Music struck a deal with Def Jam largely because of Jeezy's rapport with Def Jam top executive Antonio "L.A." Reid and Executive Vice President Shakir Stewart, who were known for cultivating successful hip hop and rap artists. Stewart, credited with helping to make Atlanta the "Motown of the South," took his life in Atlanta in 2008.
Around early 2005, according to the lawsuit, CTE signed a production deal with Def Jam in which Jeezy would deliver six albums as a solo artist.
At the time of the agreement, Ellerbee said he and Jeezy were producing Jeezy's platinum-selling "Let's Get It: Thug Motivation 101," which was later released by Def Jam and sold 2 million copies.
Three more albums were later released as part of the deal: "The Inspiration" in 2006, "The Recession" in 2008 and "Thug Motivation 103: Hustlerz Ambition" in December, 2011. Ellerbee said he was the "executive producer" for each of the albums, in addition to being Jeezy's manager from time to time.
Funds 'intentionally misappropriated'
As Jeezy's relationship with Def Jam grew, however, Ellerbee became less of an influence in the company, according to his attorney, even though he still considered himself an equal partner.
"Essentially, Young Jeezy just kind of took over the company, and elected to take all the funds," Breedlove said.
The suit says Jeezy "intentionally misappropriated, diverted and/or converted" CTE Music funds for the rapper's personal use, including a $1 million Def Jam advance for "The Inspiration" album, which the suit said the rapper diverted to his own personal account. Jeezy is also accused of diverting other advances from Def Jam to his personal accounts.
In addition to at least $5 million in damages, Ellerbee is seeking interest, punitive damages and legal costs. New York-based Def Jam's parent company, Universal Music Group, also is named as a defendant in the suit.
CTE Music has grown to be one of the dominant local hip hop and rap labels in Atlanta. In addition to Jeezy, the label's artists include Freddie Gibbs, Slick Pulla, Scrilla, Tru Breed and Tone Trump.
Ellerbee also said he is the founder of Hush Management, a music company he started in 2006 in Atlanta. In an online bio, Ellerbee says he has " negotiated multi-million dollar endorsement deals, managed projects and overseen collaborations with Jeezy and superstars such as Usher, Kanye West, Lil Wayne, Mary J.Blige, Rick Ross, Timberland, Jay-Z, The Dream, Fabolous, Jadakiss, and R. Kelly."
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