Paul McCartney’s Beatles Lawsuit: Ruling, Cost, and 1975 Dissolution

On December 31, 1970, Paul McCartney filed the Beatles lawsuit that formally began the end of the band, asking London’s High Court to dissolve the partnership known as “The Beatles & Co.” and to appoint a receiver over its finances. The defendants were John Lennon, George Harrison, Ringo Starr, and Apple Corps.¹ The real target, though, was the band’s manager, Allen Klein. On March 12, 1971, Justice Stamp ruled for McCartney on every point.²

Why McCartney Sued

The dispute started with a management fight. On February 3, 1969, Lennon, Harrison, and Starr voted to appoint Klein as the group’s business manager. McCartney was the sole holdout; he had wanted his future father-in-law, Lee Eastman, and Eastman’s son John to handle the band instead. Lee Eastman was named a temporary business advisor, but Klein held the real power. McCartney later said in the Anthology project: “I realised I was expected to go along with it, but I didn’t think it was a good idea.”³

McCartney’s grievances were specific. Klein had brought in Phil Spector to add orchestral overdubs to “The Long and Winding Road” without McCartney’s consent.⁴ Klein had transferred the Let It Be film rights from Apple to United Artists and had tried to delay the release of McCartney’s debut solo album. McCartney also said he had never received audited accounts of the partnership during its four-year existence.¹

The structural problem sat underneath all of it. A partnership deed signed on April 19, 1967, bound the four Beatles together for ten years and required them to share all income equally, including from solo projects, with the exception of songwriting royalties. Each member held 5 percent of the partnership; the collective corporation that became Apple Corps held the remaining 80 percent.⁵ The arrangement was built to lower tax liability while the band was a working unit. Once the members stopped playing together and started competing solo careers, the court would later call it “confused, uncertain and confusing.”⁶

Why He Had to Sue the Band, Not Klein

McCartney has said his lawyers told him he could not sue Klein directly. Klein was not a party to the 1967 partnership contract. The only legal route to break Klein’s grip on the band’s money was to dissolve the partnership that gave him his authority, which meant suing the other three Beatles and Apple Corps.⁷ The filing landed in the Chancery Division of the High Court on the last day of 1970 and asked the court to declare that the partnership “ought to be dissolved,” to appoint a receiver, and to address Klein’s handling of Apple funds.¹

The Trial

The hearing opened on February 19, 1971, at the Royal Courts of Justice in London and ran for eleven days before Justice Stamp.² McCartney was represented by David Hirst, QC, and Andrew Leggatt. The defense was led by Morris Finer, QC.⁸

Only McCartney appeared in person. Lennon, Harrison, and Starr submitted sworn affidavits saying they had faith in Klein’s business abilities and integrity, and their counsel read those into the record.⁶

Hirst attacked on two fronts. He called Klein “a man of bad commercial reputation” and told the court that just three weeks before the hearing, Klein had been convicted of ten counts of tax fraud in the United States.⁸ He also argued that Klein’s appointment had violated the partnership agreement, which required unanimous consent, and that Klein’s company, ABKCO, had charged fees beyond what was agreed.²

The defense misfired. Rather than argue narrowly that the partnership should continue, Klein’s side tried to defend his overall management. Midway through, Klein insisted his own 46-page affidavit be read into the record, blaming his tax conviction on an employee and disparaging McCartney and Lee Eastman.⁶ Justice Stamp was unimpressed.

Justice Stamp’s Ruling

On March 12, 1971, Justice Stamp ruled for McCartney on every point. He ordered the dissolution of the partnership, found Klein’s appointment a breach of contract, and appointed London accountant James Douglas Spooner as receiver to manage the band’s assets.⁶

The judge described Klein’s testimony as “the irresponsible patter of a second-rate salesman” and said Klein had made “grossly excessive claims for commissions.”² He found that Apple Corps had acted in bad faith and noted the company had been losing more than £300,000 a month by 1969 for lack of proper oversight. Klein told reporters the judge “didn’t understand what it was all about” and “got lost” because he “got Beatlemania.”⁸

Lennon, Harrison, and Starr had a week to appeal. They filed one, then dropped it on April 26, 1971. Their barrister read a statement saying his clients believed “it is in the common interest to proceed to explore as a matter of urgency a means whereby the plaintiff may disengage himself from the partnership by agreement.”⁹ Their estimated legal bill by that point was £100,000.

What It Cost McCartney

Winning did not make him popular. “I was thought to be the guy who broke The Beatles up and the bastard who sued his mates,” McCartney said later.¹⁰ Lennon saw the lawsuit as a public betrayal and accused McCartney in letters of lacking the “guts to say anything to my face,” arguing he had already left the band months earlier.¹¹ Lennon’s song “How Do You Sleep?” mocked McCartney’s songwriting.

The personal fallout was severe. McCartney went through a period of depression and heavy drinking. His wife Linda later described having to “handle this all by myself” while caring for their children and a husband who “didn’t want to get out of bed” and “felt useless.”¹² The couple retreated to High Park Farm on Scotland’s Kintyre peninsula, where McCartney turned to manual labor: shearing sheep, laying cement floors, tending a vegetable garden.¹³ Linda drew him back toward music and encouraged him to form Wings.

The Other Beatles Came Around

Within a couple of years, the other three reached the same conclusion about Klein that McCartney had. In 1973, after declining to renew Klein’s contract, Lennon, Harrison, and Starr sued him in London, citing excessive commission fees, mishandling of the Concert for Bangladesh charity funds, misrepresentation of their individual financial standings, and failure to support Apple Records artists.¹⁴ Klein countersued in New York for $19 million. A 1977 settlement had Apple paying Klein and ABKCO just over $5 million, while Klein paid $800,000 split among Harrison’s company Harrisongs, Ringo Starr, Apple Films, and Apple Records.¹⁵ In the 2026 documentary Man on the Run, McCartney says Lennon eventually admitted he had been right about Klein.¹⁶

The Formal Dissolution Took Until 1975

Justice Stamp’s 1971 order appointed a receiver and directed that the partnership be wound up, but the paperwork ending The Beatles & Co. took nearly four more years. Tax questions around McCartney’s withdrawal were a “major source of antagonism” between the parties.¹⁷ Spooner served as receiver throughout, while the four members continued to run Apple Corps separately.

A two-page dissolution contract, sometimes called the “Beatles Break-Up Contract,” was signed by all four. McCartney and Starr signed first, then Harrison. Lennon was the last, signing on December 29, 1974, in Florida after missing an earlier session at New York’s Plaza Hotel ten days before.¹⁸ A private hearing at London’s High Court on January 9, 1975, formalized the agreement.¹⁹

Under the settlement, all outstanding legal and business disputes among the four were resolved, each member was free to pursue his own career, and all four became directors of Apple Corps Ltd., which stayed in operation. Solo royalties would from then on go directly to each individual rather than through Apple, while Apple Corps continued to handle joint Beatles projects, past and future.¹⁹ Apple Corps Ltd. is still in operation, owned by McCartney, Ringo Starr, Yoko Ono Lennon, and the estate of George Harrison.²⁰

How McCartney Has Explained It Since

McCartney has returned to the subject many times, always with the same core argument: suing was the only way to get Klein out. “The only way for me to save The Beatles and Apple… was to sue the band,” he told British GQ in 2020. “If I hadn’t done that, it would have all belonged to Allen Klein.”⁷

He has also framed the action as protective of the others. “I also knew that, if I managed to save it, I would be saving it for them too. Because they were about to give it away. They loved this guy Klein. And I was saying, ‘He’s a fucking idiot.'”²¹ He has credited the lawsuit with making later projects possible, including the Anthology, subsequent remasters, and Peter Jackson’s Get Back documentary.

In a September 2025 interview, McCartney called the decision “very, very difficult” and said the stigma was so heavy that “for years I almost blamed myself.”²² In Man on the Run, released on Prime Video in February 2026, he acknowledged that some of his own conduct during the breakup was “driven by frustration and ego,” while still maintaining that “John broke up The Beatles. But I got the rap.”²³

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Cult Following. Paul McCartney Says Decision to Sue the Beatles Was Very, Very Difficult
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WFMD. Paul McCartney Reveals Explosive F-You John Moment After Beatles Lawsuit