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Beyonce to Appear in New York Court on Breach of Contract Action

Posted on Jan 01, 2016

In November, a New York appellate court ruled that a $100 million breach of contract suit against pop star Beyonce could proceed. As a result, the famous singer will appear at the New York State Supreme Court Appellate Division. That court upheld a lower court ruling in April of 2012 that dismissed the singer’s motion to dismiss the lawsuit filed by New York-based video game maker Gate Five LLC.

In the suit, Gate Five alleges that:

  • Beyonce and Gate Five had a licensing agreement to develop a motion-sensing dance video game called “Starpower: Beyonce”
  • Gate Five invested approximately $6.7 million in developing the game
  • Beyonce demanded new compensation terms after the agreement was already in place
  • Beyonce opted to back out of the deal just before Christmas in 2010
  • The deal’s collapse forced the company to terminate the employment of 70 people and destroyed the firm’s business

In her defense, Beyonce’s attorneys argue that she had the right to void the contract because the company had not obtained sufficient financial commitment for the project by a certain date. They allege that Gate Five failed to obtain $5 million in committed financing. In response, Gate Five is arguing that an investor had agreed to provide $19.2 million in financing before Beyonce terminated the agreement.

The initial filing of the lawsuit was in April of 2011. Gate Five is seeking more than $100 million in damages to compensate the company for its lost profits.

Contact a New York breach of contract attorney today at (888) 497-3410 for more information about breach of contract and other business litigation matters.

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