A New York appeals court has slashed damages stemming from a legal battle over a Ja Rule album from $54m (£30m) to just $126,720 (£69,987).
Ja Rule recorded the tracks with rap group Click Money Click
Record giant Island Def Jam Music Group were ordered to compensate independent label TVT in May 2003 for allegedly stopping the record being released.
But the appeals court said there was insufficient evidence for the jury to conclude a fraud had taken place.
TVT's legal team said it would contest the steep reduction.
"This is not over and we look forward to the next round," said TVT's lawyer Peter Haviland.
Def Jam's lawyer called the ruling a "decisive victory, completely vindicating Mr Cohen" - now president of Warner Music Group.
Island Def Jam were told to pay TVT $108m (£59m) in punitive damages and $24m (£13m) in compensatory damages after a jury found the company and its former chairman Lyor Cohen liable for fraud, copyright infringement and interference with a contract.
The trial judge subsequently lowered the award to $54m (£30m).
The dispute arose over tracks Ja Rule recorded with two friends under the name Click Money Click when he was signed to TVT in 1994.
The rapper - real name Jeffrey Atkins - was later dropped by TVT and moved to Island Def Jam five years later. He has since signed to the Murder Inc label.
The legal action came after the New York-based TVT alleged that Island Def Jam blocked the completion of the album.
TVT also said it had released one of the contested songs, The Rain, without the company's permission.
The original £132m (£73m) award was one of the largest in music industry history.
But the appeals court reversed the finding of liability and set aside the damages awarded.
TVT's lawyer remained upbeat. "We were forced to bring this action in part because Mr Cohen and Def Jam denied the existence of a contract critical to our business," said Mr Haviland.
"This court has affirmed that we did have a contract and that the defendants broke it."