Claiming that 7 Little Johnstons is being “held hostage,” Discovery Communications today filed a writ of possession against the company that produced it, seeking the immediate possession of all the completed episodes of the second season of the hit reality TV show. (Read it here and here.) The move is the latest in the ongoing dispute between Discovery and LMNO Productions, whose offices were raided by the FBI in June.
In a statement provided to Deadline, LMNO responded to the filing, insisting it is acting within its legal rights in the matter. “Regarding Discovery’s motion filed today pertaining to the ‘Seven Little Johnstons’ series, we can confirm that Discovery failed to sign the negotiated contract for this season of the show, and failed and refused to pay the agreed-upon price for these episodes. Now, Discovery wants to obtain the footage without paying for it; in the absence of a signed contract, they have no right to do so. LMNO will be responding officially to Discovery’s motion through the appropriate legal channels.”
Discovery canceled its deal with LMNO in June after an internal audit allegedly turned up discrepancies in the production company’s books. At that time, Discovery said it was taking possession of six shows LMNO was producing for its various networks.
LMNO then filed a $7 million breach-of-contract and copyright infringement suit against Discovery, accusing the giant media company of conspiring with its former accountant to squeeze LMNO out of the six shows.
In a subsequent counter-suit, Discovery accused LMNO of having kept two separate sets of books to conceal its deceptive business practices.
In today’s filing, Discovery said that it is “contractually and equitably entitled to the program deliverables for 7 Little Johnstons, for which it has paid LMNO in full. Discovery lawfully terminated all of its contractual dealings with LMNO on June 17, 2016, and in what appears to be a retributive act for such lawful termination, LMNO is holding the program deliverables for 7 Little Johnstons hostage, demanding that Discovery pay it hundreds of thousands of dollars more before it will release these materials. Discovery should not have to pay a ransom for materials it already owns and that LMNO is unlawfully retaining.”
The writ goes on to say that the show was produced pursuant to an arrangement under which Discovery commissioned LMNO to produce the program for Discovery. “Therefore, from the outset, Discovery has always retained, and will continue to retain, all rights in 7 Little Johnstons, including the underlying copyright and the possessory right as to the program deliverables for that program.”
LMNO claims that its former accountant, who it subsequently sued for embezzlement, tried to shake the company down, and when that failed, falsified its books in an attempt to “irreparably damage LMNO’s reputation and business.”
That accountant now appears to be the whistle-blower who took evidence of LMNO’s alleged wrong-doing to the FBI.
“Discovery learned from a whistleblower that LMNO was, and has been for years, systematically defrauding Discovery,” the media giant said in its writ. “Triggered by the whistleblower, Discovery undertook to determine the scope of the betrayal and the damage LMNO inflicted on Discovery. Among the steps Discovery undertook was to reach out to LMNO to obtain more information and to seek to conduct audits of books and records relating to programs LMNO produced for Discovery. Rather than cooperate with Discovery on the audits (as contractually required) or seek to quell Discovery’s serious concerns, LMNO stonewalled, delayed, and frustrated Discovery’s efforts. In the midst of Discovery’s efforts to investigate the full breadth of LMNO’s fraudulent scheme, Discovery was contacted by the Federal Bureau of Investigation in March 2016 seeking information in connection with what Discovery learned was an ongoing federal criminal investigation into LMNO’s business practices.”
The writ states that “despite Discovery’s contractual right to, and multiple requests that LMNO immediately deliver, all program deliverables for 7 Little Johnstons, LMNO is wrongfully detaining them and attempting to extract a ransom. By holding the program deliverables hostage, LMNO is inhibiting Discovery from utilizing materials that Discovery has paid for and is fully entitled to, as the contracts expressly provide that such materials must be delivered to Discovery post-termination.”