Lil Durk is facing a lawsuit that claims he signed deals with two different entities for the same song rights — a move that one of the buyers now calls a “manifest fraud.”
In a complaint filed Wednesday (Dec. 6) in Manhattan federal court, a fintech firm called Exceed Talent Capital says Durk (real name Durk Derrick Banks) agreed to grant the company the recording royalties from his song “Bedtime” even though he had already signed an exclusive deal with Sony’s Alamo Records.
“Despite defendants’ unambiguous contractual representations and warranties regarding their rights in the Banks recording, Exceed has now learned that Banks previously had assigned to a third party the exact same rights,” the company’s lawyers wrote.
The lawsuit claims that the move by Durk — who reached No. 2 on the Hot 100 earlier this year with his “All My Life” — caused Exceed to incur more than $12 million in damages.
“As defendants have failed and refused to acknowledge any responsibility for their intentional misrepresentations and material contractual breaches, let alone take action to rectify the same, Exceed was compelled to bring the present action to obtain legal redress,” the company wrote.
According to the complaint, Exceed agreed to pay Durk $600,000 for the recording rights to “Bedtime.” The company says it wanted to package Durk’s track into a fractional investment vehicle, which would allow investors to buy the right to receive ongoing royalties to the song.
“Where I’m from, few own anything,” the rapper said in a press release announcing Exceed’s royalties investment product. “As The Voice of the Trenches and for my label OTF, I’m always looking for ways to expand and give back to my people. Exceed makes it possible for my fans to become part of my team and share in our success together.”
But in May, Exceed received a cease-and-desist from Alamo. The label informed the fintech firm that Durk was “signed to an exclusive recording agreement with Alamo” and that he did not possess the right to sell his recording royalties to anyone.
“Rather, as Alamo informed Exceed, Alamo possesses those (and a number of further) exclusive rights pursuant to an agreement that Alamo entered into with Banks [in 2021], well over a year before defendants entered into, respectively, the [agreement with Exceed].”
Exceed says it demanded that Durk either fix the situation or refund $450,000 that had already been paid, but that he “utterly ignored” those requests. The lawsuit says the debacle forced Exceed to cancel the sale after it had already “expended significant time, effort and financial resources” in getting it approved by the Securities and Exchange Commission.
“Exceed was compelled … to return the funds that had been invested by third parties in the Offering, further significantly damaging Exceed’s reputation and relationships with its partners and investors,” the company wrote.
