Jay-Z settles multi-billion dollar Cognac brand battle
A lawsuit between rapper Jay-Z and spirits giant Bacardi over joint Cognac venture D’ussé has finally been resolved.
The Empire State of Mind singer and Bacardi have reached an agreement regarding the ‘mismanagement’ and worth of their joint Cognac brand D’ussé.
Jay-Z instigated the litigation by demanding a buy-out over concerns that a Bacardi subsidiary (Empire Investments Inc.), which looked after the daily operations of D’ussé, had mismanaged the Cognac brand by failing to prepare for a surge in consumer interest.
During a lawsuit which first saw Bacardi take the upper hand, winning several preliminary rounds in arbitration and rejecting a US$1.5 billion offer from Jay-Z to buy-out Bacardi’s stake in the business, the musician challenged the composition of the arbitration panel, accusing one of its members of being a racist and another of holding a personal grudge against him.
According to Bloomberg Law, Jay-Z’s company, SCLiquor, claimed in a separate lawsuit that Bacardi was stonewalling its requests to examine company records for evidence that Bacardi was intentionally running D’Usse into the ground to manipulate its valuation and drive down the buyout price.
The lion’s share of the dispute, which has rumbled on for many months, has been over the true value of the company, with Jay-Z rumoured to have seen its worth as between US$3 million and US$5 million, while Bacardi at times implied the value to be much lower.
The settlement, reached on Friday 3 February 2023, states that Empire Investments must buy out Jay-Z’s stake in the Cognac company, leaving Bacardi owning at least 75.1% of the business. At the time of writing, no sum had been disclosed to the public.
Jay-Z, through SCLiquor, will retain a “significant ownership stake” and said in a statement that he is “excited to renew this partnership with Bacardi.”
In a statement made to Bloomberg Law, Bacardi called Jay-Z “an invaluable partner.”
“We have deep respect for his creativity and business acumen and are proud of our accomplishments in establishing D’ussé as a leader in an exciting and competitive category,” the statement said.
D’ussé is described as having a bright floral bouquet with rich woody undertones, and notes of almond, cinnamon, and sweet honey.