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BUZZ: Knowles Empire Rattled by Drama

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Move over, Michael Lohan: There’s another celebrity dad making headlines these days.

Over the past few months, Beyoncé‘s father and manager, Mathew Knowles, 58, has been coping with personal and professional drama – including a divorce, a reported paternity suit, and now, the departure of one of his biggest clients.

On Tuesday, singer Michelle Williams, 29, one-third of Destiny’s Child, announced she was leaving Knowles’s company, Music World Entertainment. “From my time in Destiny s Child to my solo career, I am grateful for everything Mathew and his team has done for me,” she said in a statement. “We’ve shared great success together. However, as I move in a new direction in my career, I felt it was time. I wish Mathew Knowles and the Music World Entertainment family all the best.”

Knowles’s camp tells PEOPLE: “Michelle is a gifted artist. Her contribution to the Music World family with Destiny’s Child and as a solo artist was extraordinary. The decision to part ways is amicable and we wish her success with her future endeavors.”

Build Up to Exit

According to an insider, the singer’s departure did not come as a surprise to Mathew and his camp. “They were like, ‘Good for her.’ They knew that things were going on with him and that things [in his personal life] were going to be revealed. There’s been a build-up to this.”

Last year, Kelly Rowland, 28, the third member of Destiny’s Child (who, as a teen, lived with Knowles and his wife, Tina), also left the company.
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“Beyoncé has kind of distanced herself from her father too,” adds the insider. “A lot of his personal stuff was overshadowing what was being done for Michelle. She got fed up and decided it was time to move on.

In October, Knowles was reportedly named in a paternity suit filed by a women in her late 30s who was six months pregnant. Mathew Knowles had no comment on the reported paternity suit. (The legal papers are sealed to protect the baby.)

The following month, Tina, 56, filed for divorce after 29 years of marriage.

“The decision to end our marriage is an amicable one. We remain friends, parents, and business partners,” the couple said in a statement in December, when the news became public. “If anyone is expecting an ugly messy fight, they will be sadly disappointed. We ask for your respect of our privacy as we handle this matter.”

So far, Knowles s personal issues have not negatively impacted his company s success: Billboard magazine named Music World the top imprint label of 2009.

Meanwhile, Beyoncé is laying low. In fact, she told USA Today that she has no plans to record new music anytime soon.

“It’s definitely time to take a break, to recharge my batteries,” said the singer, 28, who will perform at the Grammys on Jan. 31, where she is nominated for 10 awards. “I’d like to take about six months and not go into the studio. I need to just live life, to be inspired by things again.”