Murphy, whose influential dance-rock group called it quits in 2011, wants nearly $100,000 from Tim Goldsworthy, the British producer with whom he started the New York City music label and production team DFA Records.
In a lawsuit, DFA accuses Goldsworthy of failing to perform services he was paid for, owing outstanding loans, improperly using the company credit card and making unauthorized withdrawals from its bank accounts.
The lawsuit, filed Friday in Manhattan Civil Supreme Court, says that "attempts to amicably resolve this matter were rebuffed" by Goldsworthy. It also accuses the producer of "breach of contract" and "unjust enrichment."
Goldsworthy owes a total of $93,899, according to DFA. The label, which has a studio in Greenwich Village and boasts such acts as Holy Ghost!, also seeks punitive damages and legal fees.
Goldsworthy and Murphy formed DFA Productions and DFA Records in 2001. The creative pair once made sweet music together, drawing critical and commercial success for producing albums by The Rapture.
DFA also put out albums by Murphy's Grammy-nominated band, LCD Soundsystem. The group broke up after playing a sold-out show at Madison Square Garden in April 2011, chronicled in the documentary "Shut Up and Play the Hits."
Goldsworthy reportedly split from DFA three years ago, when he moved from New York back to the UK. At the time, DFA label manager Jonathan Galkin told music news website Resident Advisor that Goldsworthy took off without letting the company know.
"Tim Goldsworthy moved away to somewhere in the United Kingdom, without informing anyone here at DFA," Galkin said.
"We have had no word from him since he left the United States. So we moved on with our lives and our business," he told the website. "Simple as that. He most definitely took a piece of us when he left, but we wish him the best with whatever he gets up to next."
Goldsworthy, who is listed in the lawsuit as a managing member of DFA, told the website at the time that he relocated to raise his family and that he hadn't severed ties with the label.
Murphy, who lives in Williamsburg, and Goldsworthy could not be reached for comment.