A Los Angeles court has refused to toss out a lawsuit brought by Snoop Dogg against Pabst, for which the rapper was once the face of its Blast by Colt 45 drink. Snoop claims that the $700m sale of Pabst in 2014 triggered a section of his endorsement contract with the company under which he is entitled to 10 per cent of the ‘net sales price’, in addition to the $2.2 million he receives in quarterly payments, royalties and other compensation. While a summary judgement motion filed by Pabst argued that the 2014 sale falls under an exception in Snoop’s contract which excludes stock purchases and deals done between Pabst subsidiaries or affiliates, the argument failed to win favour with Los Angeles Superior Court judge Malcolm Mackey. The case will go to trial on 31 October, with lawyers for Snoop Dogg estimating that the rapper could seek up to $6m including tort claims and punitive damages.

Case details

The convoluted 2014 deal involved Pabst’s grandparent company, Pabst Corporate Holdings, selling all of its stock in Pabst Holdings, which is the sole shareholder of Pabst Brewing, to a group of third-party buyers. Pabst has argued that the deal merely transferred control, not ownership, of Pabst Brewing and the Blast by Colt 45 brand, and as such does not trigger the phantom equity clause in Snoop’s contract. However, lawyers for Snoop have countered that the company ‘structured the sale of Pabst in an effort to intentionally frustrate Plaintiff’s rights through a sham alter ego holding company structure.’ While Judge Mackey said it was unlikely that the nine-figure deal was structured purely to sidestep Pabst’s obligations to Snoop, he has allowed the case to proceed to trial.

Sources: National Law Journal; The Hollywood Reporter