Rock Group Limp Bizkit and its lead singer, Fred Durst, have sued Universal Music Group (“UMG”) for $200 million in alleged unpaid royalties. The lawsuit was recently filed in U.S. District Court in California. The band contends that UMG committed fraud, breach of contract and breach of fiduciary duty. In particular, the band contends that UMG designed a software system that “systematically prevented artists from being paid their royalties”.
The group hit its peak in the 1990s and early 2000s. However, they had a second wave of popularity in recent years. Despite not releasing any new music, the band had 450 million streams in 2024 and is selling out its concerts.
Bizkit is asking for a court order terminating its contracts with UMG and seeking the astronomical sum of $200 million in damages. It should be noted that generally, plaintiffs are free to allege any amount of damages they choose.
Durst’s legal counsel questioned why UMG was not paying any royalties to the group. UMG claims the reason is no royalties were due since the group had not recouped their advances. When Durst’s reps reviewed UMG’s royalty portal, they found that $1 million was due to the group. So why then did the group sue for two hundred million?
The complaint alleges that the group’s account “had been payable starting in 2019 and UMG then fraudulently reclassified it as ‘unrecouped’” to prevent payment of royalties even though the band had been selling millions of records. For instance, a royalty statement in 2022 showed a balance due, but the complaint alleges that it was labeled unrecouped six months later.
UMG claims this was a mistake due to its use of new accounting software. The main issue in this case is whether or not this is a simple accounting mistake or intentional fraud using “creative” accounting.
UMG claims it has paid the group approximately $43 million in advances over the years, and that is why it has only recently recouped and started paying royalties to the band. Limp Bizkit disputes that it has received $43 million in advances and claims that number is almost $30 million more than they actually received. The issue of unpaid royalties to recording artists has come up often as labels claim they are unrecouped, even though some artists have sold millions of records.
After UMG discovered the alleged mistake, it paid the band approximately $1 million in past due royalties. In addition, it paid Flawless Records (owned by Durst) $2.3 million.
The group claims that it has lawfully terminated its contracts with UMG based on UMG’s alleged breach, although the label continues to exploit the group’s recordings.
I would guess this lawsuit ends up settling, and for a lot less than $200 million.
GLENN LITWAK is a veteran entertainment attorney based in Santa Monica, CA. He has represented platinum selling recording artists, Grammy winning music producers, hit songwriters, management and production companies, music publishers and independent record labels. Glenn is also a frequent speaker at music industry conferences around the country, such as South by Southwest and the Billboard Music in Film and TV Conference. Email Litwak at [email protected] or visit glennlitwak.com.
