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Lauryn Hill is being sued for breach of contract and fraud by her fellow Fugees bandmate, Pras Michél.
The lawsuit, filed on Monday in New York, claimed that Hill mismanaged the budget of the band's 2023 comeback tour and it became "so bloated with unnecessary and, most likely fictitious, expenses, that it seemed designed to lose money."
Michél said the tour was going to be "a huge commercial success, since most of shows for the entire arena size tour were sold out in advance", but he walked away empty-handed because of Hill's "narcissistic tendencies" and "arrogance".
In a statement, Hill called the lawsuit "baseless" and "full of false claims and unwarranted attacks."
The lawsuit also claims that Hill turned down $5m (£3.8m) to play at the Coachella festival without telling Michél about the offer, because the Fugees would not be top of the bill.
Michél also criticised Hill's "chronic tardiness" for performances.
In response, Hill's statement added that she had been "pushing through because I understood that Pras was under duress because of his legal battles and that this was perhaps affecting his judgment, state of mind, and character.
"Last year’s tour was put together to celebrate the 25th Anniversary of the album The Miseducation of Lauryn Hill. It was being planned whether the Fugees were involved or not.
"The tour was expanded to incorporate the Fugees because I found out that Pras was in trouble and would need money to aid his legal defense."
Michél was found guilty in 2023 of illegal lobbying. US prosecutors said he had received more than $100m (£80m) from Malaysian billionaire Jho Low that was used in two efforts to influence US politics.
Hill added that Michél's lawsuit "notably omits" that he was given an advanced overpayment of $3m (£2.3m) for the last tour to pay off his legal fees.
He is yet to "repay substantial loans" that she gave him as an "act of goodwill", she claimed.
Hill and the Fugees are set to play three dates in the UK next week, including a night at the O2 arena in London.
Michél's lawyer said he would not be participating in the shows.
The Fugees were formed in New Jersey in 1990 by Hill, Michél and Wyclef Jean, and their hits included Ready or Not and Killing Me Softly.