11th Circuit and 2 Live Crew: Contingent Copyright Termination Right...

06/03/26

In a case of first impression, the Eleventh Circuit addressed the intersection of Copyright Law and Bankruptcy Law, and whether an artist’s statutory copyright termination rights are property of the Bankruptcy Estate. Lil’ Joe Records, Inc. v. Mark Ross, Luther Campbell, et al., 2026 WL 1549151 (11th Cir. June 2, 2026) (click here for .pdf). What will be interesting to Bankruptcy lawyers is that the estate property in question is analyzed as of 2020, but the Chapter 7 case was filed in 2000 and closed in 2007. In what realm of the universe the property exists now is a question not addressed by the Court. (If you are mainly interested in Copyright Law, you probably should just go right to the opinion).

The statute at issue is Section 203 of the Copyright Act, 17 U.S.C. §203.

Section 203 of the Copyright Act allows the authors of copyrighted works (or their successors in interest) to terminate grants of copyrights… The author (or his successors) can exercise his termination interests only by serving a signed, written notice on a copyright grantee or the grantee’s successor in title. … … [I]f a work has multiple authors, section 203 requires a majority of those authors (or their successors in interest) to sign a notice to cause a termination… [Additionally] section 203 makes an author’s termination interests
inalienable by agreement.

Now to the basic facts. 2 Live Crew is a hip-hop group formed in 1984, with members including Mark Ross (“Brother Marquis”), Luther Campbell (“Luke Skywalker”), David Hobbs (“Mr. Mixx”) and Christopher Wong Won (“Fresh Kid Ice”). The Band gave Luke Records the sound recording rights in all master recordings through 1990. In 1995, Campbell and Luke Records filed jointly administered Chapter 11 cases, in which Luke Records sold all sound recording copyrights it received under the agreement to Lil’ Joe Records and Joseph Weinberger. In 2000, Ross filed a personal Chapter 7 case (ND of Ala., 00-43637-JJR7), but his termination rights were never scheduled, administered or even mentioned in the case. “[P]roperty that is not scheduled, administered, or formally abandoned remains property of the estate ‘[u]nless the court orders otherwise.’” See id. § 554(c), (d).”

In 2020, Campbell, Ross and Wong’s heirs served a termination notice on Weinberger, Lil’ Joe and related companies, purportedly terminating 2 Live Crew’s grants of the copyrights to Luke Records for the albums recorded between 1986 and 1989. Lil’ Joe then sued (complaint) and sought a declaratory judgment that the copyrights were not, or could not have been, properly terminated. One of the grounds was that Ross transferred his termination interests to the Bankruptcy Estate in his 2000 Chapter 7 case, rendering ineffective his signature on the 2020 Termination Notice. After a trial, the District Court ruled the Termination Notice was valid and Lil’ Joe appealed.

The Court first concluded that Ross’ termination rights were property of his Chapter 7 Bankruptcy estate as a “contingent right to regain personal property,” which includes copyrights and other intellectual property, that existed when he filed his petition. 2 Live Crew argued that 17 U.S.C. §203 made the copyrights inalienable from and personal to the author, but the Court ruled that the Bankruptcy Code prevailed as to what is property of the Bankruptcy estate. The Band also argued that Ross’ termination interests were not property of the estate because they were contingent rights, “contingent on (1) Ross surviving until he could use his termination interests and (2) Ross and his co-grantors deciding to use those interests.” See 17 U.S.C. § 203(a) (1), (3)–(4). Again, the Court held that contingency interests were property of the Bankruptcy estate.

Having concluded that Ross’ termination rights were property of his Chapter 7 Bankruptcy estate, he could not exercise his termination interests in 2020 because those rights remained with his Bankruptcy Estate and he had no authority to do so. “In a Chapter 7 case like Ross’s case, property that is not scheduled, administered, or formally abandoned remains property of the estate ‘[u]nless the court orders otherwise.’ See 11 U.S.C. § 554(c), (d). .. Because no one scheduled, administered, formally abandoned, or mentioned those interests, they remained part of Ross’s bankruptcy estate when he signed the notice.” Since Ross’ signature on the Termination Notice was ineffective, the Notice did not include a sufficient number of signatures. “Without Ross, the group’s termination notice exercised at most two of the group members’ interests. That number is too few to terminate a transfer of copyright that —like the alleged transfer at issue—was executed by four authors. See 17 U.S.C. § 203(a)(1), (4). A termination notice ends a transfer made by multiple authors only if it exercises most of their interests. Id. So two out of four interests is one interest short of an effective termination.” Having concluded the Termination Notice was ineffective, the Court reversed the District Court. It did not address how the termination rights should be treated in Bankruptcy or what Ross’ heirs (he died in 2024) need to do to exercise those interests. Thus, Lil’ Joe Records still owns the rights to those 2 Live Crew albums and the Band can’t take them back (at least for now).

In less than a day, this case has already been covered by Music Business Worldwide, Bloomberg, Billboard and other media.

Scott Riddle’s practice focuses on bankruptcy and reorganization. Scott has represented businesses and other parties in Bankruptcy cases for over 20 years. You can contact Scott at 404-815-0164 or [email protected]. For more information, click here.

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11th Circuit and 2 Live Crew: Contingent Copyright Termination Right...