In recent bankruptcy news, the former manager of the Black Eyed Peas, Sean Larkin, filed for Chapter 7 bankruptcy. His debts are between $500,000 and $1 million. However, that is not the end of his troubles. The popular hip hop band is now suing him for fraud and deceit because Larkin failed to file income tax returns for the band over a seven-year period which has, according to the band members, cost them more than three million dollars. Larkin allegedly lied to the Black Eyed Peas when he promising to file the overdue tax returns and when he claimed that these overdue returns would cover the costs of the returns he originally failed to file. Larkin also apparently hid letters from the band issued by the IRS and state tax authorities in which they demanded the back taxes.
The band contends that Larkin made these promises to them in an attempt to induce the plaintiffs not to sue him. They claim his actions amount to fraud and malice.
As a result of Larkin’s failure to file the federal and state tax returns, the band cut off all ties to their manager.
Larkin has also been sued by a television executive. Larkin admitted in a deposition taken in this executive’s action that he had not filed the returns because he was overwhelmed by the explosion of work after the Black Eyed Peas hit it big.
Larkin’s deal with the band gave him a five percent cut of all their income, including revenue from music sales, concerts, merchandising and endorsement deals. Given the popularity of the Black Eyed Peas, Larkin should have been a multimillionaire, but instead he is flat broke. His assets total less than $500,000. Amongst other debts, Larkin owes money on a condominium and on a minivan. Not surprisingly, he also owes more than $1 million himself in taxes.