The auction of Damon Dash’s one-third stake in Roc-A-Fella Records, which was initially scheduled for late August, has been postponed until Sept.. 21, new court documents reveal.
The delay, granted by a federal judge on Tuesday, Aug. 27, according to Billboard, also includes a significant increase in the minimum bid for Dash’s stake, now set at $3 million, more than double the original amount.
Why the Auction?
The auction is part of efforts to address Dash’s substantial debts, including unpaid taxes to the Harlem native’s home state and child support.
The U.S. Marshals Service is set to manage the sale of Dash’s 33.3% interest in Roc-A-Fella Records, with the proceeds aimed at paying off an $823,000 judgment against Dash. This judgment was secured by movie producer Josh Webber following a failed film partnership, defamation and copyright infringement following a dispute over the 2016 film “Dear Frank.“
Before the judge’s ruling in February 2024, Dash had refused to pay the judgment.
However, the auction’s scope has expanded as New York City seeks over $193,000 in unpaid child support, and New York State demands more than $8.7 million in back taxes.
Chris Brown, Webber’s attorney, filed a motion to delay the auction, noting that he had reached an agreement with New York City and New York State to establish a priority order for the auction proceeds.
The judge approved this motion, pushing the auction date to September 21 and setting the minimum bid at $3 million.
According to the agreement, New York City will receive $193,000 from the sale to cover Dash’s child support arrears.
Following that, $1.7 million will go to New York State to address part of Dash’s tax debt. Only after the government gets its due will Webber will be paid the $823,000 he is owed.
Remaining funds will go toward satisfying other civil litigants and further reducing Dash’s tax obligations, which still total around $7 million. Any surplus after that will be given to Dash.
Several unresolved issues remain.
New York City is requesting an additional deposit of nearly $70,000 from Dash to secure future child support payments, with a demand to pause any payouts from the auction until a judge decides on the matter.
Brown has opposed this, and a hearing is set for next month.
Dash has not involved in these negotiations, and his attorney, Natraj Bhushan, says that his client is not taking his discontent lightly.
According to the lawyer, Dash was “not privy to these discussions, had no input on the same, and disagrees with the priority given.”
Bhushan also told Billboard, “We look forward to the upcoming court conference so that all interested parties can be heard and the court can decide who gets what, and in what priority from the forthcoming public auction.”
The auction will exclusively cover Dash’s stake in Roc-A-Fella Inc., whose primary asset is Jay-Z’s debut album “Reasonable Doubt.”
The broader Roc-A-Fella catalog, which predates the label’s 2013 dissolution, is not part of the sale. Jay-Z (Shawn Carter) and Kareem “Biggs” Burke, who own the remaining two-thirds of the company, have previously attempted to block the auction through changes to company bylaws and legal actions. However, their efforts were dismissed by a federal judge in February.
Despite the increased minimum bid, the actual value of Dash’s stake remains uncertain. The eventual buyer will secure a share of the royalties from “Reasonable Doubt,” which has achieved 2.2 million equivalent album units in the U.S. since its 1996 release, including 21,500 units acquired by fans so far this year.
However, the buyer will also face the challenge of being a minority owner alongside potentially hostile partner. Additionally, Roc-A-Fella’s rights to “Reasonable Doubt” might expire in 2031 due to copyright termination rights, allowing Jay-Z to reclaim full control.
The forthcoming auction is poised to draw significant attention, not just for its financial implications, but also for the legal complexities surrounding the ownership of one of hip-hop’s most iconic label and the rights he has to it as an architect of Jay-Z’s early career.
