The battle for Death Row Records continues as Lydia and Michael “Harry-O” Harris have filed a new lawsuit against Marion “Suge” Knight pertaining to his April 2006 bankruptcy filing.
The new lawsuit, filed in The United States Bankruptcy Court In The Central District of California, Los Angeles Division, is filed against Knight personally and seeks to exclude the debt owed to Lydia Harris from any discharge Knight may receive in the bankruptcy process.
The claims in the new lawsuit arise from Knight’s alleged fraud, breach of fiduciary duty and intentional torts against Lydia Harris.
The issues were raised in the State Court and resulted in a default judgement in favor of Lydia Harris in the amount of $107 million dollars.
Lydia Harris was awarded the default judgement after the Superior Court found Knight and Death Row allegedly thwarted Lydia’s efforts to enforce her rights and Knight’s alleged willful refusal to cooperate in discovery efforts.
The underlying actions stems from Lydia Harris’ claim that her husband invested $1.5 million dollars to start Death Row Records, which has sold tens of millions of records since being founded in 1991.
Michael Harris claims he struck a deal with Knight in which Lydia and Knight would be 50/50 partners in Death Row Records.
Michael Harris claims the deal was made from in the Metropolitan Detention Center, where he was awaiting trial in Federal Court for conspiracy charges.
After that deal was made, the Harris’ claims Knight and Death Row set out to exclude Lydia from her rightful interest in Death Row Records.
Lydia and Michael are now divorced, and it is now settled that Michael is entitled to a community property interest in the default judgement.
Knight and his attorneys in turn sued Michael, his attorney and Lydia’s former attorney and others in February of 2006 for $106 million dollars alleging fraud and racketeering, claiming Michael Harris was extorting Knight by threatening to claim Death Row Records was funded with drug money.
In April, Knight filed for bankruptcy protection to avoid the State Court from placing a receiver in Death Row, after Knight missed a number of court dates and continued to disobey court orders requiring him to produce documents and answer questions under oath.
Knight’s attorneys claimed he is filing bankruptcy to reorganize his finances and to temporarily retain control of Death Row Records, which once counted Dr. Dre, Snoop Dogg, Tha Dogg Pound and Tupac Shakur – the best selling rapper of all time – and others among the artists on the label.
A bankruptcy hearing is scheduled for today (July 7) for the court to decide whether a bankruptcy trustee in both the Knight individual case and the Death Row bankruptcy cases should be appointed.
If a trustee is appointed, Knight will no longer be in control of Death Row Records and his personal affairs.
Attempts to reach Knight for comment were unsuccessful as of press time.