Trent Reznor Sues Ex-Manager For Millions

Nine Inch Nails frontman charging former associate with fraud and breach of fiduciary duties.

Nine Inch Nails frontman Trent Reznor is suing former manager John Malm for millions of dollars.

According to Interscope Records, Reznor filed suit in U.S. District Court Southern District of New York, charging his former associate with fraud and breach of fiduciary duties. The industrial rocker claims Malm’s Ohio-based company, J. Artist Management, engaged in unlawful and immoral conduct for years, cheating Reznor out of money that rightfully should have gone to him. (EDITOR’S NOTE: Reznor’s suit also originally made similar allegations against accountant Richard Szekelyi, but the court later determined there was no evidence of wrongdoing against Szekelyi and dismissed him from the suit.)

In his suit, Reznor alleges that he was convinced to sign a five-year management agreement in 1989, even though material information was not disclosed in the contract. He claims that Malm registered the Nine Inch Nails copyright and took 50 percent ownership in merchandising, the Nothing Records label and earnings from other Reznor projects; that more than $3 million of Reznor’s money was directed to jointly owned corporations without the musician’s knowledge; and that Malm used Reznor’s money and company money for personal travel, entertainment and expenses.

Reznor also claims that Malm’s management agreement gave them 20 percent of all gross monies paid to or earned by Reznor in perpetuity, even if J. Artist Management was no longer representing him, 20 percent of all album advances, including those not yet recorded, and the irrevocable right to collect income payable to Reznor, endorse his name and cash checks payable to him, and pay itself with that money.

While Reznor is convinced he is owed millions of dollars, he isn’t sure exactly how much, so he has petitioned the court to order J. Artist Management to open its books to provide full disclosure of the amount he is due. In his suit, Reznor seeks to be repaid the full amount owed to him plus punitive damages, and to retain full interest in the Nine Inch Nails name and logo.

In the early ’90s, Malm played an integral role in facilitating Reznor’s departure from TVT Records. When the dust cleared in 1992, Reznor and Malm formed their own label (in partnership with Interscope and TVT), Nothing Records.

Last year, Reznor underwent a bitter parting from Malm, who had managed him since the mid-1980s. He is now represented by Jim Guerinot’s Rebel Waltz Management. The new Nine Inch Nails album, Bleed Through, is slated to come out later this year (see “Trent Reznor Rewrites NIN Rulebook For ‘Brutal’ New Disc” ).