Hands up! Black Eyed Peas manager accused of not filing taxes for group
Yu filed the papers in Superior Court in response to a lawsuit originally brought against her and ten other defendants by Larkin in November. That suit alleges defamation-libel; intentional interference with contract; and intentional interference with prospective economic advantage. Among the specific accusations is that when Yu learned that Larkin failed to file federal and state tax returns, she "hatched a deliberate and illegal plan to ruin Larkin's reputation and poach his clients."
Yu has stated that Larkin failed to file tax returns or keep accurate financial records for the group. She further asserted that he put the Black Eyed Peas at "considerable risk" with his behavior.
Larkin, however, claims that Yu brought problems onto the group, including an audit, by spreading "venomous lies and fabricated accusations" about him. He is seeking at least $5 million in damages on the defamation count alone. He says, in his complaint, that the failure to file tax returns for the Peas was "inadvertent."
Yu does not deny making the statements. In fact, she went into even more detail in her answer to the court, alleging that the failure to file tax returns reaches back at least eight years; that more than $10 million in income went unreported to taxing authorities; that Larkin failed to make timely elections for s corporations associated with the band; and that Larkin has never (her emphasis) filed a tax return for the group's touring company. As a result of Larkin's behavior, Yu says that the California Franchise Tax Board has suspended some of the group's corporate entities and that the group has incurred financial losses.
Yu says that her statements are either truthful or made in good faith, considered a defense to the charge of libel. Yu's defense further asserts that Larkin would not be entitled to recover damages because of his own behavior; in the law, this is referred to as the "unclean hands defense." She has asked that the suit be dropped and that she be awarded costs associated with the suit.
Yu is represented by business litigator Alan Weil of Gaims, Weil, West & Epstein, LLP. Larkin is represented by Skip Miller of Miller Barondess, LLP. Miller's former clients have included Rod Stewart, Elton John, Bob Dylan, Sean Connery and Nikki Sixx together with Motley Crue.
The Black Eyed Peas have not commented publicly on the matter.