According to court documents obtained by Complex, McDJ claims that Glassnote is misrepresenting their business relationship in regards to Glover's work, which is explained briefly in McDJ’s statement in the legal documents, shown below.
"Under the License Agreement, Glassnote is obligated to pay [McDJ Recording] a “Royalty” equal to 50% of the Net Proceeds received from the exploitation of the master recordings subject to that agreement. The Net Proceeds are defined as the “Gross Revenues” that exceed “Deducted Expenses.” Because SoundExchange royalties received by Glassnote, as the purported rights holder, are included in the definition of “Gross Revenues” under the License Agreement, those royalties are subject to the 50/50 Net Proceeds split."
Earlier this summer, Glassnote intended to sue Donald Glover for failing to pay over the money he owes from streaming earnings, which netted him $700,000 USD according to TMZ.
However, McDJ refers to a complaint filed by Glassnote earlier this year, and accuses Glassnote’s claims to be misleading. McDJ argues that the issue is about the unpaid royalties owed to them, since Glover is entitled to a 45 percent cut of the royalties, however, McDJ claims that the 50 percent that goes toward the copyright owners was to be split between them and Glassnote.
Furthermore, McDJ has also accused Glassnote of failing to report other payments that they should have received. In reference to an audit report, McDJ accuses Glassnote of taking "excess distribution fees, underreporting of international revenues, deduction of excess producer royalties, underreporting of merchandise sales, and undocumented manufacturing expense charges."
For the full story, head over to Complex.