Megan Thee Stallion is hurling new accusations at her record label 1501 Certified Entertainment, including that the company is trying to make itself “judgment-proof” by draining its bank accounts.
In an updated version of her long-running lawsuit, the “Savage” rapper’s lawyers claimed Wednesday that they had unearthed evidence that 1501 founder Carl Crawford had “dissipated millions of dollars held in 1501’s primary bank account,” including funds that will potentially be owed to Stallion.
“Instead of following its financial manager’s advice and holding the contested funds in reserve, 1501 has chosen to enrich itself and its consultants, leaving less than ten thousand dollars in the account,” Megan Thee Stallion’s lawyers wrote. “Based on 1501’s undercapitalization, it is highly probable that 1501 will be judgment-proof by the time Pete is able to obtain a final judgment on the merits of her claims.”
As a result of this “fraudulent transfer of assets,” Megan Thee Stallion’s lawyers demanded that the judge overseeing the case impose extraordinary restrictions while the case continues to play out.
“Pete seeks the appointment of a receiver to take possession of 1501 until this dispute is resolved, or in the alternative, the appointment of a receiver to take possession of all of 1501’s bank accounts and any other bank accounts controlled or owned by Carl Crawford, including the bank accounts to which the money siphoned out of the bank account was transferred into.”
In a statement to Billboard, 1501’s attorneys sharply disputed the new claims from Megan Thee Stallion (real name Megan Pete).
“1501 strongly disagrees with the substance of Ms. Pete’s recent filings,” said Kenneth D. Freundlich of Freundlich Law and LeElle B. Slifer of Winston & Strawn LLP. “The allegations are without merit and we are confident that 1501 will prevail on these motions and ultimately recover the substantial money that Ms. Pete owes 1501.”
A rep for Megan Thee Stallion did not return a request for comment on the new filing.
The star rapper has been fighting with 1501 for more than two years, claiming the company duped a young artist into signing an “unconscionable” record deal in 2018 that was well-below industry standards. Megan Thee Stallion says that when she signed a new management deal with Jay-Z’s Roc Nation in 2019, she got “real lawyers” who helped her see that the deal was “crazy.”
She filed the current case in February 2022, claiming 1501 had wrongly classified her Something For Thee Hotties as something less than an “album” — a key distinction, since she owes a set number of albums under her record deal. 1501 then quickly countersued, arguing that Thee Hotties contained just 29 minutes of original material and obviously did not meet the definition of an “album.”
The two sides then escalated the case last summer. Megan Thee Stallion filed a new complaint seeking more than $1 million in damages over claims that 1501 had “systematically failed” to pay enough royalties. 1501 then fired back with new accusations of its own, claiming it’s actually Megan Thee Stallion who owes “millions of dollars.”
Until Wednesday’s bold new accusations, it had appeared that tempers might actually be cooling. In an interview with TMZ in February, Crawford expressed some regret over his public feuding with Megan Thee Stallion and said he would be “taking a different approach” in the future: “I never had problems with Megan Thee Stallion, but this social media stuff turned it really sour.”
But in addition to Wednesday’s new allegations about 1501’s bank accounts, Megan Thee Stallion’s lawyers also filed a separate motion asking the judge to summarily rule that 1501 had breached its contracts with Megan Thee Stallion. The reason? They say 1501 has chosen to categorically deny all requests to license Megan’s music until the case is resolved — representing a “flagrant breach” of the deal.
“In furtherance of its relentless efforts to sabotage Pete and her career, 1501 has taken the unlawful and unjustifiable position that it will continue to deny every single licensing request until its publishing claim in this litigation is resolved,” Megan Thee Stallion’s lawyers wrote. “1501 has taken this draconian position out of spite, a fact that 1501’s representatives have admitted under oath.”
The judge overseeing the case ruled in December that the battle will ultimately need to be decided by a jury. A trial is currently set for August, but after Wednesday’s new filings it’s unclear if the case will be able to stick to that schedule.