*Snoop Dogg is out for big money with a new lawsuit he filed against Pabst Brewing Company on Monday (July 6)
According to Courthouse News, the rapper (born Calvin Broadus Jr.) and his loan-out company Spanky’s Clothing sued Pabst Brewing Company, Blue Ribbon Intermediate Holdings and New Owner Does, in Los Angeles Superior Court. At the heart of the suit are claims from Broadus that Pabst “owes him 10 percent of the $700 million sale of the company attributable to the Colt 45 brands he endorsed.
In his complaint, the entertainer claims that he revitalized the Colt 45 brand in January 2011 in a 3-year consulting agreement. With the agreement, Broadus was given an up-front fee of $250,000, eight quarterly payments of $62,500 and appearance and sales fees. Among the products he endorsed was Blast by Colt 45, a fruit-flavored alcohol drink.
Broadus goes on to mention that the agreement contained a “Phantom Equity Clause,” stating that if Blast by Colt 45 or the entire Colt 45 brand family was sold within 2 years after the end of his 3-year term, he was to “receive 10% of the net sales price of such sale.” The only exception to the clause was if Colt 45 were sold to a Pabst affiliate, Broadus stated.
Courthouse News references more information from the complaint, which states that Pabst was bought by C. Dean Metropoulos and his private equity firm for about $250 million in May 2010. It was that company that made the deal with Broadus and Spanky’s.
The complaint reaches back to 2014 when Metropoulos agreed to sell Pabst, and its Colt 45 brands, to Eugene Kashper, with private equity funding provided by TSG Consumer Partners, for “a reported $700 million” in September of that year.
According to Broadus, the sale of Pabst in November, which was well within the 2 years covered by the Phantom Equity Clause.
“Pabst has taken the (very convenient) position that no transaction has occurred such that Subsection (a) of the Phantom Equity Clause would be triggered,” he said. (Parentheses in complaint.)
In addition, Broadus pointed out that he would have demanded more money up front and for 3 years if it weren’t for the Phantom Equity Clause. Although Pabst is named in the lawsuit, Kashper, Metropoulos nor TSG Consumer Partners were not named as parties, Courthouse News reports, adding that Broadus’ 16-page endorsement contract is attached as an exhibit to the complaint.
Broadus is seeking unspecified damages for breach of contract, breach of faith, conversion and intentional interference with contract.
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