(CN) – The new CEO of embattled hip-hop record label Deathrow Entertainment claims her financier diverted company assets. Lara Lavi, primary shareholder, sole managing member and CEO of Wideawake-Deathrow Entertainment, sued New Solutions Financial Corp. and affiliates in New York County Court.
Lavi says she bought Deathrow Records in January for $18 million in a Los Angeles bankruptcy court auction, and formed Wideawake-Deathrow Entertainment.
Lavi accuses New Solutions CEO Ronald Ovenden of “self-dealing actions” that forced Deathrow to “adopt unauthorized liabilities.”
Lavi has told reporters that Ovenden inspired the takeover by asking her to find an entertainment company that was ripe for investment.
In her complaint in Manhattan, Lavi seeks a court order keeping Ovenden and New Solutions Capital Group from making agreements on behalf of Deathrow and from executing the company’s shareholder business.
Founded in 1991, Deathrow housed some of the highest-profile hip-hop acts of the ’90s, including Tupac Shakur, Dr. Dre and Snoop Dog. It landed in bankruptcy after a Los Angeles court ordered former CEO Suge Knight to pay Deathrow co-founder Lydia Harris $107 million to settle her claim that Knight had forced her from the label.
According to industry lore, Knight also refused to pay royalties to Deathrow artists, dangled Vanilla Ice from a 15-story balcony for refusing to sign with Deathrow, and helped spark the feud that culminated in the tit-for-tat deaths of West Coast rapper Shakur and East Coast rival Biggie Smalls.
Lavi also sued her former company, Ontario-based WIDEawake Entertainment Group, New Solutions Financial Corporation and New Solutions Managing Director Robert Thompson. Ovenden is chairman of both WIDEawake Entertainment and New Solutions, according to the complaint.
Lavi is represented by Anthony Hilton and Joseph Mainiero.