Legendary rapper C.L. Smooth is taking a royalty dispute to federal court, alleging a New York couple diverted approximately $132,000 in SoundExchange payments owed to him.
The rapper, whose real name is Corey Penn, filed the lawsuit Sept. 13 in the U.S. District Court for the Southern District of New York in White Plains. According to the complaint, Penn alleges that Nikolas and Nichelle Taylor redirected his royalty payments without his knowledge.
The lawsuit also names St. Nick Entertainment Inc., a Mount Vernon hip-hop label founded by Nikolas Taylor in 2006, and Taylor Your Care, a home-care staffing company founded by Nichelle Brown-Taylor.
Penn says he has known Nikolas Taylor since 1989 through New York’s music and social circles. Around 2001, Taylor allegedly began helping Penn book performances.
The complaint says the two never entered into a formal written management agreement. Instead, their business relationship allegedly operated largely on personal trust and their longstanding connection.
Penn also alleges that he provided Taylor with confidential information, including his passport, for international performances.
According to the lawsuit, the relationship eventually deteriorated over financial and business disputes involving St. Nick Entertainment as well as Penn’s independent recordings and other projects. Penn alleges that he ended his business dealings with Taylor around 2007.
Around that period, a SoundExchange account was allegedly created in Penn’s name, with royalty payments reportedly sent to addresses connected to the Taylors.
Penn says he discovered the account in March while attempting to establish his own SoundExchange account. SoundExchange subsequently investigated the account and, according to the complaint, identified approximately $132,000 in royalty payments dating back to early 2006.
The lawsuit alleges that tax forms and royalty checks were sent to the Taylors’ residence in Elmsford, as well as other addresses associated with them in Pleasantville and Yonkers.
Penn further alleges that the checks were made payable to him but were endorsed by Nichelle Taylor before being deposited by the Taylors.
He says he has since regained control of the SoundExchange account and received approximately $30,000 in accumulated royalties covering 2023 through 2026.
Penn is asserting claims including fraud, conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and unjust enrichment.
He is seeking recovery of the allegedly diverted funds as well as unspecified punitive damages.
The allegations have not been proven in court. The Taylors could not be reached for comment on the lawsuit.
For C.L. Smooth, the legal fight now puts a decades-old business relationship and years of music royalties under a federal court’s scrutiny.
