It seems obvious that for something like this, you'd set up a new company, call it "Beats by Dre", assign everything to it, and then just have equity ownership split between the two companies. Far simpler and more transparent.
It's hard to imagine anyone would negotiate with the music industry without assuming they're trying to screw you.
I find it very hard to be sympathetic with such a scummy company as Monster. They chose to play ball with better negotiators than themselves and got burned in the process.