Why is Limp Bizkit suing Universal Music Group? $200 million lawsuit over unpaid royalties, explored

On Tuesday, October 8, the iconic Nu-metal band Limp Bizkit filed a lawsuit in Los Angeles’ Central District, alleging that Universal Music Group owed the band at least $200 million in unpaid royalties. The band accused UMG of fraud, breach of contract, breach of fiduciary duty, and misrepresentation.

Limp Bizkit alleged that the company intentionally designed a software system to conceal royalties from artists and systematically prevent them from being paid.

The lawsuit explained that despite Limp Bizkit's recent resurgence in popularity, the band was reportedly not paid what they were owed by UMG.

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Limp Bizkit accused UMG of using royalty software and systems intentionally designed to conceal artist royalties

The lawsuit detailed that the Grammy-nominated band gained popularity during the early 2000s but tapered off in the 2010s. However, they experienced a resurgence around 2017-18, currently sitting at 450 million streams on Spotify alone.

It also claimed that the band was even selling out arenas and headlining major festivals without releasing any new album since 2021's Still Sucks. Just over last year, the band claimed that their assets grew by 68 percent.

Despite this sudden resurgence in popularity, the band claimed in the lawsuit filed in California federal court that UMG did not pay them what they were owed in royalties.

Limp Bizkit's lead singer Fred Durst and the Durst-owned Flawless Records were named as the plaintiffs in the lawsuit. The suit noted UMG's claim that their ongoing investment in their royalty reporting systems allowed them to give detailed royalty data to their artists.

However, the plaintiffs alleged that this was not the case. The lawsuit read:

"Plaintiffs have discovered that, contrary to these claims, not only did UMG never have any intention of paying Plaintiffs, it designed and implemented royalty software and systems that were deliberately designed to conceal artists’ (including Plaintiffs’) royalties and keep those profits for itself."

It further added:

"On information and belief, Plaintiffs’ discovery of UMG’s design flaw in its royalty software is systemic and affects not only Plaintiffs but possibly hundreds of other artists who have unfairly had their royalties wrongfully withheld for years."

As per the lawsuit, when Fred Durst asked why he did not receive his royalties, UMG told him that the singer had to recoup advances he’d been paid. However, when Durst's business managers inspected the company's royalty management portal, he discovered that he was allegedly owed over $1 million.

As per the lawsuit, Limp Bizkit's accounts were payable from 2019 but the company allegedly fraudulently reclassified them as "unrecouped" to stop that from happening.

Even though a royalty statement from a second-quarter Limp Bizkit project allegedly showcased a positive balance, it was still shown to be unrecouped by around $200,000.

The non-payment of royalties was labeled by a UMG executive as a "one-off mistake" triggered by a software error. The band later received $1 million in back royalties. Durst's very own Flawless Records also received $2.3 million for a 1999 first-look deal.

An executive reasoned that the royalties were only recently being reflected in the band's account due to UMG allegedly paying the band $43 million in advances. However, Limp Bizkit and Fred Durst claimed that this was a hugely inflated figure by around $30 million.

Limp Bizkit and Fred Durst requested $20 million in damages and claimed that after a complete discovery, the amount that they are owed could “easily surpass” $200 million.

The band aimed to sue the company for fraudulent concealment, breach of contract and fiduciary duty, intentional and negligent misrepresentation, promissory fraud, copyright infringement, and more.

According to Lip Bizkit, they terminated their contract with UMG on September 30 due to the aforementioned reasons but claimed that the company was still taking advantage of their music.