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Counsel Concerns: Lawyer Ethics Rule In Play in Suit By Business Manager Against Rap Artist

By Stan Soocher
August 01, 2018

The U.S. District Court for the Western District of North Carolina dismissed a conversion counterclaim by rapper Chingy against his former business manager Leslie King, who is a lawyer, on the ground that the artist hadn't established that a royalty purchase agreement he signed with the lawyer was void for allegedly violating the state's attorney ethics rule. Viper Publishing Inc. v. Bailey, 3:17-CV-00314. However, the district court allowed the artist to pursue the ethics rule as an affirmative defense in the underlying lawsuit the attorney's music company has filed against Chingy.

King's Viper Publishing sued Chingy for allegedly breaching a contract under which Viper claims it obtained the right to Chingy's digital performance royalties from his sound recordings. Chingy argues he thought the purchase agreement included only one of his tracks.

Under the conflict-of-interest provision of Rule 1.8 of the North Carolina's Rules of Professional Conduct, when an attorney acquires “an ownership, possessory, security, or other pecuniary interest directly adverse to a client,” the lawyer must in writing make full disclosure to the client and advise the client to seek independent counsel for the transaction, as well as obtain informed written consent from the client.

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