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‘Duck Dynasty’ Producers Fire Back at ITV Studios With $100 Million Lawsuit

Variety logo Variety 1/10/2017 Cynthia Littleton
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The principals of the production company behind “Duck Dynasty” have filed a $100 million lawsuit against ITV Studios, accusing its leaders of mounting an “outrageous campaign of intimidation and extortion” to depress the price ITV would pay to acquire the remaining 40% of Gurney Productions.

The suit filed Tuesday in Los Angeles Superior Court follows ITV’s firing last month of Scott and Deirdre Gurney from their namesake company, which ITV acquired a majority interest in 2012. ITV has sued the couple, claiming they engaged in fraud and used company funds for personal expenses, among other allegations.

“The actions taken by ITV and its appointed board members are reprehensible,” said the Gurneys attorney Michael Weinsten of Lavely & Singer. “My clients will not be intimated by their outrageous, strong-arm tactics to acquire my client’s interest in Gurney Productions at a massively discounted price. We will hold each of these defendants personally accountable for the many millions in economic damages to my clients, and damage to their good name and reputation.”

The suit cites ITV Studios executives Brent Montgomery, Andrew Garard and David McGraynor as defendants along with the company.

In a response, ITV released a statement saying that the filing “comes as no surprise as the Gurneys attempt to salvage their reputation.”

“ITV absolutely refutes all of the allegations in this claim as completely baseless and without merit. We will be vigorously pursuing the lawsuit we filed against Scott and Deirdre Gurney in December, following the termination of their employment, on the grounds of self-dealing, fraudulent concealment and breach of contract.”

Producer Craig Armstrong was named interim CEO of Gurney Productions after the Gurneys were ousted. ITV said hat he has “the full ground support of ITV America’s senior team.”

“It’s very much business as usual and our brilliant production team remains focused on making and delivering great shows,” ITV said in its statement.

But the Gurneys say that ITV sought to oust them in an effort to purchase the remaining stake in the company at a price that was lower than market value.

In their lawsuit, they note that when they sold a 61.5% stake in their company to ITV for $40 million upfront, they were given exclusive authority to run the company’s day-to-day operations as long as they retained their minority stake. ITV was given an option to purchase that stake over three to five years at a price set by the company’s profitability.

Their suit claims that in the next three years, Gurney Productions increased its profits by 65%.

But in 2015, a rift developed between the Gurneys and a newly named board member, Montgomery, one of their competitors. “Montgomery was effectively poison to Gurney Productions and wanted complete control — something he could not obtain until ITV bought the Gurneys out,” the lawsuit states. “However, given the success of Gurney Productions, ITV would have to pay a steep price to purchase the Gurneys’ stake, something ITV was unwilling to do.”

The lawsuit claims that the defendants “concocted a scheme” two squeeze them out of the company and tarnish their reputation.

According to their complaint, the Gurneys were “lured” to a board meeting on Dec. 5 in Sherman Oaks, where they were “ambushed” with “false accusations of impropriety (not previously disclosed), threats of termination and outright extortion — all targeted to the unlawful end of forcing the Gurneys to sell at an outrageously low price.” The Gurneys claim that Montgomery told them at the meeting that “the minute you guys tell us this is not going to resolve today … all the networks are getting alerted, the agencies, the talent, everyone gets alerted.”

The Gurneys refused, and later that day media outlets began to report on the alleged “fraud.”

In their lawsuit, the Gurneys claim they were entitled to a “fair hearing” before the board, with counsel present, to address the allegations, as well as a 30-day “cure” period to address any alleged breaches of their agreement with ITV.

The Gurneys contend that within minutes of the Dec. 5 meeting, ITV exercised its right to “call” the purchase the remaining stake in the company, under a “termination with cause” provision that may have resulted in a 25% reduction of the call price. But the Gurneys lawsuit contends that the call provision applied only to terminations before the end of fiscal year 2015.

Instead, the Gurneys said that they have exercised their “put” rights that compel ITV to purchase the remaining stake at a 25% premium above the regular call price.

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