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Reznor Bares Teeth in Court

05/17/2005 2:06 PM, E! Online
Charlie Amter

Did Trent Reznor's ex-manager bite the hand that fed him?

The Nine Inch Nails frontman is trying to persuade a New York jury of just that as he finds himself in the most clich of all rock 'n' roll soap operas: band versus manager.

The 40-year-old post-industrial poster boy testified Monday against his ex-manager, John Malm, accusing Malm of swindling millions of dollars and misleading the rocker for years on the state of his NIN money.

Reznor's suit for breach of contract and breach of fiduciary, filed May 19, 2004, claims Malm engaged in a host of deceptive practices, including diverting funds without Reznor's knowledge, using band money for personal travel and entertainment purposes and tricking Reznor into signing a contract that allowed Malm to collect 20 percent of the singer's gross earnings, rather than the less lucrative net earnings.

Around the same time Reznor filed his suit last year, Malm filed a counterclaim contending Reznor actually owes him $2 million in commissions.

Ironically, even in the unlikely scenario that Reznor wanted to pay Malm the commissions, he may be a little short on cash because of his ex-manager. On the witness stand Monday, Reznor said as recently as 2003 he had only $400,000 in liquid assets, per a financial statement sent to him from Malm.

Naturally, the multiplatinum-selling artist blames his ex-manger, who helmed Reznor's NIN career since the late 1980s and helped him land, then successfully escape, his first record deal with TVT Records in 1989.

Malm's lawyer, meanwhile, painted a different picture of Reznor's financial situation.

"Of the millions upon millions upon millions that Trent Reznor and Nine Inch Nails made, the vast majority went into his [Reznor's] pocket," attorney Alan Hirth said in his opening statement.

Reznor said he spent more time making music and taking drugs than reading the fine print. "John was the business guy, and I was the guy working for nothing in the studio," the alt-rock icon told jurors.

The Pennsylvania-born songwriter said he became suspicious in 2002 when Malm said there was "cause for alarm" regarding Reznor's finances.

Shortly thereafter, the "Hurt" singer asked for a financial statement from Malm. The statement Malm sent showed Reznor had $3 million in total assets, including a New Orleans home the artist sold earlier this year, but only $400,000 in cash.

While $3 million in assets surely beats working at Burger King, Reznor has sold north of 20 million records worldwide since 1989's Pretty Hate Machine and expected to have more in the bank.

"Where did all my money go?" Reznor asked rhetorically in a recent interview with the New Zealand Herald. "When I was f--ked up I wasn't really paying attention but I trusted this guy with my life. So I fired [him] and it was like, 'Okay, let's start over again.' "

And start over again is just what a newly sober Reznor has done.

His first post-Malm studio release, and first new music in six years, With Teeth, debuted atop Billboard's Hot 200 last week, moving 272,000 copies. "The Hand That Feeds," the first single off Teeth, is the number two song on Billboard's Modern Rock Tracks chart for the second week in a row.

While things are certainly looking up on the financial front for Reznor (he is currently in the middle of a sold-out U.S. tour), Malm says the Grammy-winning artist has no one but himself to blame for his past financial woes.

"After 20 years of my professional and personal friendship and support, through some of his darkest hours and at great expense to me, he has decided that everyone in the world is to blame for his problems except himself," Malm said in a statement last year when Reznor filed suit.

"It's time for him to take some responsibility for his actions."

Now, it's up to a jury to decide.

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