Roc-A-Fella Records Inc. has been granted a temporary restraining order against a co-founder of the album, in order to prevent him from auctioning off the rights to a Jay-Z album as an NFT.
Roc-A-Fella was granted the order by a judge in a New York court, in connection with attempts by founder Damon Dash to sell the copyright of Jay-Z’s debut album “Reasonable Doubt” as a non-fungible token.
The label, which is owned in thirds by Jay-Z, Kareem Burke and Damon Dash, sued Dash for the attempted sale, alleging he did not own the rights he was attempting to auction via the token sale. The petition to the court claims that it is in fact the record label that owns the rights to the album, and seeks a temporary restraint on Dash from offering up the rights for sale.
Earlier this week, New York district judge John P. Cronan agreed to the restraining order until July 1, at which time Dash will be expected to bring evidence to a hearing as to why the attempted sale should be allowed to proceed.
Roc-A-Fella said the bottom line of the case was “simple,” and Dash did not have the rights to sell what he was purporting to transfer as the token, calling this a breach of fiduciary duties.
“An individual shareholder, like Dash, does not own the corporation’s assets — only the corporation does — and an individual shareholder cannot sell, transfer, or otherwise encumber a corporate asset. The bottom line is simple: Dash can’t sell what he doesn’t own. By attempting such a sale, Dash has converted a corporate asset and has breached his fiduciary duties.”
Roc-A-Fella described Reasonable Doubt as its “most prized asset,” and said it was inevitable Dash would carry out the sale if the court did not intervene to stop him.
The judge ruled that Dash was restrained “from altering in any way, selling, assigning, pledging, encumbering, contracting with regard to, or in any way disposing of any property interest in Reasonable Doubt, including its copyright and including through any means, such as auctioning a non-fungible token reflecting such interests.”
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