Just days after putting Gurney Productions founders Scott and Deirdre Gurney on a “short, temporary leave of absence,” the duo of the company behind Duck Dynasty have been pink slipped by the board and today face a fraud and breach of contract lawsuit from owners ITV America
“Following a meeting with Scott and Deirdre Gurney, the Board of Gurney Productions has been left with no alternative but to terminate their employment and file a lawsuit in the Superior Court of California on the grounds of self-dealing, fraudulent concealment and breach of contract,” said a Gurney Productions spokesperson today of the firing that occurred yesterday.
The Gurneys were put on leave on Monday, with Craig Armstrong appointed interim CEO. The 5×5 Media co-CEO will remain in that post for the near future it seems. This comes as A+E Networks unsurprisingly announced in mid-November that Gurney’s flagship series Duck Dynasty would wrap up after its fifth season – though specials remain an option.
It seems at the heart of the dispute with ITV is the Gurneys seemingly engaging in a bit of double dipping – actually more than a bit with “unauthorized distributions to Scott Gurney, and numerous misrepresentations and active concealments by the Gurneys to the Board,” the complaint claims.
“After the Gurneys sold a majority interest in the Company to ITV and promised, among other things, not to compete with the Company while they were employed by the Company, the Gurneys secretly formed a new production company that they owned and controlled, Snake River Productions, LLC,” the injunctive relief and wide spread but unspecified damages seeking filing in LASC Friday also says (read it here).
“They formed Snake River as part of an unlawful plan to misappropriate the Company’s corporate opportunities for themselves and to artificially inflate the Company’s EBITDA,” the complaint adds with allegations of employee poaching and use of the other company’s resources to benefit Snake River. “By engaging in these wrongful activities, the Gurneys sought to generate profits for themselves at the expense of the Company and ITV and also sought to defraud ITV by securing a substantially higher payout for themselves and their closely held company, Little Win LLC when ITV bought them out.”
That buy out occurred back on December 12, 2012 with ITV taking a 61.5% ownership in Little Win. The Gurneys themselves held the remainder of the company with exclusive contracts that ITV assumed they were bound by.
The Discovery show Northern Territory lies at the heart of this dust-up with ITV saying that the Gurneys grabbed the international distribution rights to the series from their old company with a $3.53 million sleight of hand that looks aimed to directly make them much more over time. Today’s complaint even says that at a September board meeting Deirdre Gurney was asked about the matter of the Northern Territory rights and denied she knew who they had been sold to – even though it was her and her husband’s own Snake River. It was an investigation into that company and the discovery that it was owned by the Gurneys that set off the chain of events that have led to this week’s firings and legal action.
In that, a praetorian guard of lawyers represents ITV from the DC and SF offices of Squire Patton Boggs, LLP plus Paul Salvaty and Poopak Nourafchan of LA’s Hogan Lovells.