So Earl's good friend is ratting him out? Does that make sense?
I've been to Scruggs' house on numerous occasions, sat and discussed buisness with he and Louise for many hours. I was introduced by the CPA who handled his (and Lester's) affairs before and after the split, and who knew more about their situation than anybody in Nashville. He also represented a number of other country acts, many of whom also became clients during the ~20 years I provided tax-incentive investments to that market.
They broke up about the time I started working the area, and I heard all the money stories, most of which the CPA who kept the books said were untrue because he was the one looking after the money.
Their split was over the music, and made worse by Earl's popularity and success with the new venture. Lester's follow-on group did not do nearly as well. Earl wanted to continue to explore new markets and expand their popularity by "crossing-over" as it's called these days, Lester wanted to stick with what was working at the time.
No matter which side of the story you believe, this one is first hand. The first time I went to their house, the living room had no furniture, kind of like my first "real" house in the 60's. The only thing in the room was 3 banjos, in their cases in the middle of the floor. After we talked a while, I couldn't stand it and asked him why they were there. Earl has a distinctive speech pattern, and said "aw, Wayne, aw, if I leave them on the Bus, aw, they steal them."
Can't get to a TV right now, but your right Earl is good. Too bad he is big jerk in real life. I got this straight from a good friend of Earl's; He robbed Lester Flatt blind. They had a deal, split 50/50 their earnings. But as the years went on Lester noticed Earl getting richer and richer. Lester had let Earl and his wife do all the finances and Lester never over saw what was going on. When he finally did take an interest he found out that Earl was claiming as band expenses many personal things. So yes the profits were spilt but Earl was able to basically expense his life. It broke the two of them up and they never reconciled.