IP Law Daily, COPYRIGHT—11th Cir.: Bankruptcy law blocks 2 Live Crew’s bid to terminate copyright assignment, (Jun 4, 2026)

By Matthew Hersh, J.D.

A statutory termination right under the Copyright Act, like other contingent property interests, passes fully to a bankruptcy estate upon a debtor's filing.

A termination notice signed by two of the four members of a popular 1980s rap group was ineffective because at the time another member signed it, his termination right was the property of his bankruptcy estate and no longer his personal property, the U.S. Court of Appeals for the Eleventh Circuit has held. But the court, in reversing the judgment of a Miami federal court, expressed no opinion on whether the musician could still fish the right out of the bankruptcy estate and attempt to deploy it in some other manner (lil’ Joe Records, Inc. v. Ross, No. 24-13978 (11th Cir. Jun. 2, 2026)).

The band at the center of this dispute is 2 Live Crew, a hip-hop group from Miami that was commercially successful in the 1980s and early 1990s. The band, which was famous in music circles for its sometimes over-the-top sexually explicit content—and which remains famous in legal circles for its indelible contribution to fair use doctrine—was composed primarily of Luther Campbell, Mark Ross, Christopher Wong Won, and David Hobbs. During their heyday, those four musicians transferred to Luke Records, a recording company owned by Campbell, the sound recording copyrights in five of the group’s albums. But when Luke Records later went into bankruptcy, the company’s former CFO and tax counsel Joseph Weinberger acquired the rights to the band’s recorded masters out of that proceeding and began distributing them under his own label, Lil’ Joe Records.

Campbell and several of his colleagues eventually attempted to recover their copyrights in the sound recordings decades later—in an action that would lead directly to this litigation. In 2020, Campbell and the heirs of two other bandmembers, Ross and Wong Won, served a notice of termination on Lil’ Joe Records. The notice purported to terminate the assignments of copyright interests that the three band members had made to Luke Records in 1990. Lil’ Joe sued the bandmembers for declaratory judgment as to the validity of the termination notice as well as a wide range of alleged copyright and trademark violations. The bandmembers, in turn, countersued for a declaration of validity of the notice. The district court found that the notice of termination was effective, leading to this appeal.

Effectiveness of the Notice. The court of appeals reversed the judgment of the district court. Lil’ Joe’s argument about the effectiveness of the notice rested on two principles. First, the label argued, Ross’s signature on the termination notice was ineffective because his termination rights had been transferred to his bankruptcy estate (as a result of his earlier personal bankruptcy) and were no longer held by him personally. Second, the label argued, a termination notice for a work that is jointly authored can only be effective with the signatures of a majority of the joint authors—and without Ross, only two of the four band members were reflected on the notice. The court agreed with the label on both counts.

The dispute underlying the bankruptcy issue, the court noted, had to do with the interplay between the Copyright Act and the Bankruptcy Code. Section 203 of the Copyright Act allows the authors of copyrighted works (or their successors in interest) to terminate grants of copyrights. 17 U.S.C. § 203(a). That section also makes an author’s termination interests, the court emphasized, “inalienable by agreement.” Meanwhile, the court noted, Section 541(a)(1) of the Bankruptcy Code defines the property of a debtor’s bankruptcy estate to include “all legal or equitable interests of the debtor in property” as of the creation of the estate. 11 U.S.C. § 541(a)(1). And that provision applies, the court noted, “notwithstanding any provision in... applicable nonbankruptcy law” that “restricts or conditions transfer of such interest[s] by the debtor.” Harmonizing those two provisions, the court found, required a finding in favor of the label.

Ross’s termination right became part of the bankruptcy estate, the court reasoned, based on the clear text of the Bankruptcy Code. Ross’s termination interest was an “interest in property” under section 541(a)(1), the court noted, because it was “a contingent right” to regain property. Copyrights, after all, are a form of property, the court noted—intellectual property. Moreover, termination interests are “contingent rights” to regain that intellectual property years after transferring it away. “Because termination interests are contingent legal ‘rights in property,’” the court reasoned, “they are ‘interests... in property’ under section 541(a)(1).” Thus, at the time that Ross filed for bankruptcy, the court concluded, his termination right passed to his bankruptcy estate.

The fact that termination rights were characterized as “inalienable” under the Copyright Act, the court found, did not change the outcome. It was federal bankruptcy law, not federal copyright law, the court noted, that dictated what property becomes part of a bankruptcy estate. Moreover, federal bankruptcy law sweeps termination interests into a debtor’s estate under section 541 “notwithstanding any provision in applicable non-bankruptcy law.” When a “specific law” like this conflicts with a general law like the non-alienability provision, the court noted, the specific law is ordinarily “treated as an exception to the general rule.” At bottom, the court concluded, the termination interests “entered his bankruptcy estate under section 541 regardless of whether section 203 made them personal and inalienable.”

Finally, the court concluded, because Ross’s signature on the termination notice was invalid, that made the entire termination notice invalid. If a work has multiple authors, the court noted, section 203 of the Copyright Act “requires a majority of those authors (or their successors in interest) to sign a notice to cause a termination.” 17 U.S.C. § 203(a)(1), (4). Because a majority of 2 Live Crew did not exercise their termination interests, the court found, Lil’ Joe Records still held a copyright to the records covered by the 1990 agreement.

Although the bandmembers could not prevail under the factual setting of this case, the court noted, there were conceivably other ways that the band could still regain its rights. Even though Ross’s bankruptcy proceedings had ended years ago, the court noted, the termination interest remained in the bankruptcy estate solely because nobody scheduled, administered, or even mentioned those termination interests during the bankruptcy. Thus, at the time that Ross signed the termination notice, his signature was invalid because he did not have personal ownership of the rights. But “our decision is limited,” the court emphasized. “We do not address how termination interests should be treated in bankruptcy. And we do not decide today what Ross’s heirs need to do to exercise those interests in the light of his bankruptcy.”

The Case is No. 24-13978.

Judge: Brasher, A.

Attorneys: Elliot Burt Kula (Kula & Associates, PA) for Lil' Joe Records, Inc. Angela Maria Nieves (SRipLaw, PA) for Christopher Wong Won, Jr.

Companies: Lil' Joe Records, Inc.

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