Chance the Rapper Wins Lingering Legal Fight With Ex-Manager

After Chance the Rapper prevailed at a March trial against his former manager over contract and interference claims, a Chicago judge has delivered another victory for the artist, ordering the ex-manager to forfeit compensation that could exceed $1.5 million. The ruling resolves the remaining breach of fiduciary duty claim that was left to the court to decide, not the jury.

“I’m grateful to finally close this chapter of my life and can’t wait to eventually tell my side of the story,” the artist, whose legal name is Chancelor Bennett, said in a statement shared with Rolling Stone. “I’m thankful to the courts and, more importantly, to God for remaining faithful.”

In the new 28-page ruling obtained by Rolling Stone, Cook County Circuit Court Judge James E. Hanlon Jr. said the former manager, Pat Corcoran, must surrender certain vendor-paid commissions and forfeit his 15 percent management compensation tied to merchandising deals. The ruling, based on evidence presented at the jury trial and a follow-up proceeding in May, covers a period during which Corcoran earned more than $10 million managing the rapper’s music, touring and merchandise businesses, the judge said.

“Corcoran breached his duty. His merchandise company took commissions from Bennett’s own vendors on Bennett’s own orders, which is a secret profit,” the judge wrote. “Corcoran was Bennett’s agent and fiduciary. He bought goods and services with Bennett’s money, dealt with vendors in Bennett’s name, and carried Bennett’s position into negotiations with people Bennett never met. In that sphere he owed loyalty and disclosure, and the rules about secret profits and conflicting interests apply.”

The ruling did not specify exactly how much Corcoran must repay, but it said trial exhibits should help determine the amount. Representatives for Bennett said Wednesday that Corcoran would most likely have to forfeit as much as $1.5 million in management fees paid by the rapper, in addition to what they described as “kickbacks” from merchandise vendors.

The judge rejected Bennett’s requests for punitive damages and forfeiture of all the compensation Corcoran received during the period of the breaches, which would have amounted to most of his $10 million in earnings. Outside his role as Bennett’s manager and agent, the judge said, Corcoran “did not owe Bennett the first right of refusal on every investment that came across his desk” and “was free to build his own business.”

The judge said “the disloyalty that caused real harm was concentrated in the merchandise business, where Corcoran’s company sat on both sides of Bennett’s purchases over a period of time.” He found that some of Corcoran’s outside ventures “may well have looked disloyal to Bennett,” but they were deals that “Corcoran was free to pursue, since those deals fell outside the commissionable work that carried his fiduciary duties.”

In the end, the judge said that “stripping Corcoran of all his compensation across the life of the relationship would hand Bennett a windfall and would punish loyal work along with disloyal work.” He simply ordered Corcoran to surrender all commissions received from the merchandise vendors at issue and to forfeit the 15 percent management fee attributable to merchandising that was paid to him or any entity he controlled.

The judge further ordered Corcoran to transfer ownership of the domain name chancraps.com, which links back to Bennett’s merchandise and branding business. The judge said Corcoran registered the domain in his own name in 2013 and retained control of it through five years of litigation, despite Bennett’s efforts to reclaim it.

“The court ruled there is no basis for Chance’s claim of more than $10 million in damages,” a spokesperson for Corcoran tells Rolling Stone. “We are pleased that the court agreed with Pat that he ‘performed years of valuable work that Bennett accepted and profited from, work that was not self-dealing.’ It is now up to Chance to prove he incurred any harm at all in the very limited areas of merchandising outlined in the order.”