US rapper Flo Rida has won a multi-million dollar lawsuit against US energy drink company, Celsius.
In the original complaint, filed against the company in early 2021, Flo Rida and his company Strong Arm Productions sued Celsius for alleged breach of contract, and unpaid compensation over an endorsement deal signed with the artist in 2014 and renewed in 2016.
As reported by the Law & Crime Network on Wednesday (January 18), a jury in Florida awarded Flo Rida (Tramar Dillard) $82.6 million in damages this week.
According to the original complaint, “Flo Rida maintained a successful endorsement partnership with Celsius which was highly effective in opening new doors for Celsius and its products”.
It added: “As a music industry superstar and international icon with millions of digital followers, Flo Rida played an instrumental role as the worldwide brand ambassador and launched a new era for Celsius brand development, growth, and expansion.”
The filing claimed further that, from “a financial perspective”, Celsius “exponentially increased product revenues and sales, attracted key investors, and upgraded its financial status – all of which ultimately led to the important transition into the Nasdaq market in mid-2017”.
Celsius started trading on the NASDAQ Capital Market on May 24, 2017 under the ticker, CELH.
Under the first breach of contract claim, the lawsuit says that in the original 2014 agreement, provisions “relating to bonus and incentive compensation were broad and encompassed revenues to be derived as the brand developed and the product portfolio grew”.
Flo Rida alleged further that it was “specifically contemplated that as Celsius profited in the future, additional compensation would be paid by Celsius in the form of shares of company stock and ongoing royalties”.
The lawsuit added that the original agreement from 2014 “granted rights to shares of Company common stock – some at inception of the agreement and some to be issued later upon achievement of designated sales or revenue benchmarks”.
According to the lawsuit, Celsius agreed:
- “To issue additional shares as bonus compensation once the Company achieved a specified dollar amount in ‘…gross cumulative Co-branded revenues in any twelve-month period during the Term…’ and;
- To issue another additional number of shares as incentive compensation once the Company sold a specified total of ‘units of Co-branded Product through its channels of distribution following the execution of this Agreement …”
The lawsuit added: “Although both benchmarks were achieved, Celsius failed to notify Plaintiffs or issue the additional shares of company stock in breach of the 2014 Agreement”.
The lawsuit also claimed that, in the 2016 agreement, Celsius “agreed to pay a royalty per case sold of Celsius domestic ready-to-drink Sparkling Orange and a royalty per box of domestically sold powdered sticks”, but that the company failed to pay all royalties owed.Music Business Worldwide
