(CN) - Indie label Bug Music, which is currently entertaining bids for sale from major labels and American Idol creator Simon Fuller, is in hot water with CEO John Rudolph, who says the label cheated him out of his rightful share of company stock.
     Rudolph serves as a member of the board of directors for the National Music Publishers Association. He signed a deal with Bug to be the company's top executive and claims the company owes him 2 percent of its stock according to a 2006 vesting schedule.
     Bug founders Dan and Fred Bourgoise handpicked Rudolph for the job, according to a press release announcing the hiring of Rudolph.
     In 2008, Rudolph and the company signed another contract, which confirmed that the stock previously granted to Mr. Rudolph was vested and was non-forfeitable, the lawsuit states. In addition, under the terms of the second agreement, the company made a new promise to give Rudolph additional stock.
     Rudolph says he passed up "other lucrative opportunities" in favor of the job at Bug, in large part because of the promised equity.
     But despite his demands, Bug refused to hand the shares over, Rudolph claims in Los Angeles Superior Court.
     The company is reportedly looking for offers around $300 million for its 250,000-strong catalog of songs, which includes rights to hits from Kings of Leon, Eminem and Bruno Mars, who is also in the midst of a lawsuit against Bug that could complicate the company's sale.
     Stephen Mick and Devin Stone with Barnes & Thornburg of Los Angeles are representing Rudolph.