As reported by Billboard, the highly publicized court-ordered auction of Damon Dash’s one-third stake in Jay-Z’s Roc-A-Fella Records has been pushed back by at least three weeks, as per court documents. The minimum price for the sale will also be more than doubled to assist in clearing Dash’s substantial unpaid tax and child support obligations.
Initially scheduled to take place on August 29th, the auction has been deferred to September 21st, following a federal judge's approval of a request to extend the deadline. The postponement aims to allow for the resolution of the hierarchy for disbursement of the auction proceeds. Originally intended to satisfy an $823,000 judgment against Dash, the auction is now also mandated to address additional financial obligations. New York City is seeking more than $193,000 for unpaid child support, while the state of New York has laid claim to over $8.7 million in unpaid taxes.
Chris Brown, attorney for the judgment holder, Josh Webber, informed the court of an agreement reached with New York City and the state to establish a priority order for distributing the proceeds, and concurrently requested a postponement of the auction. The judge granted this request on August 27th, thus influencing the scheduled sales event.
Under this arrangement, the minimum bid for Dash’s stake has been raised from $1.2 million to $3 million. New York City will be the first entity to receive payment, collecting at least $193,000 to cover Dash’s child support arrears. Subsequently, the state will receive $1.7 million toward the significant tax liability, followed by the initial $823,000 owed to Webber in legal damages. Any remaining sum after additional civil litigants are compensated will be allocated towards the outstanding tax bill, primarily to New York state. Should funds remain, they will then be provided to Dash.
Despite these developments, unresolved matters persist. New York City is pressing for an additional deposit of approximately $70,000 to cover future child support payments, and seeks to halt any disbursements until the court addresses this issue. While Dash’s attorney, Natraj Bhushan, has opposed this motion, a hearing regarding this matter is slated for next month.
Dash himself was not a party to these negotiations as outlined in court filings submitted by his attorney, Natraj Bhushan, who stated that his client had no involvement in the discussions and disagreed with the prescribed priority order. In a statement to Billboard, Bhushan highlighted that the distribution hierarchy had yet to be finalized, expressing anticipation of an upcoming court conference to ensure all involved parties are heard before a decision is made.
In anticipation of the auction, it should be noted that the stake being auctioned pertains to Roc-A-Fella Inc., which chiefly holds Jay-Z’s groundbreaking debut album, Reasonable Doubt. The auction does not encompass the remaining catalog of music released by Roc-A-Fella, which ceased operations as an active label in 2013.
Efforts to contest the auction, including alterations to the company's bylaws and intervention in the lawsuit, were made by the owners of the other two-thirds of Roc-A-Fella, Jay-Z (Shawn Carter) and Kareem “Biggs” Burke. However, a federal court ruling in February dismissed these opposition attempts.
Despite the increased minimum bid, potential buyers are faced with uncertainty regarding the willingness to invest in Dash’s one-third stake. While earnings from Reasonable Doubt continue to be robust, with 2.2 million equivalent album units in the U.S. since its 1996 release, including 21,500 units so far this year, the buyer would find themselves as a minority stakeholder in a company controlled by adversarial partners, with limited ability to conduct customary due diligence. Moreover, Roc-A-Fella’s rights to Reasonable Doubt are poised to expire in 2031 due to copyright law’s termination right, potentially allowing Jay-Z to reclaim full control.
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