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Judge Orders ITV America to Grant More Control to Gurney Productions Founders

Variety logo Variety 6/19/2017 Cynthia Littleton
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Gurney Productions founders Scott and Deirdre Gurney are set to regain more control over the management of the company behind “Duck Dynasty” after the latest legal skirmishes between the Gurneys and ITV America.

A Los Angeles Superior Court judge on Friday issued eight sanctions against ITV America for failure to comply with the previous preliminary injunction that restored the Gurneys’ rights to run the company amid the fraud and breach of contract lawsuits now winding through the court. The sanctions included fines totaling $12,000 although the judge suspended payment so long as ITV complies with her ruling.

ITV America, which owns 60% of Gurney Productions, claims that the Gurneys committed financial fraud and deceit in the management of the company. The Gurneys counter that ITV executives manufactured the claims in an effort to drive down the price ITV would have to pay to buy out the remaining interest in the company as stipulated in the initial sale agreement struck in 2012.

In March, Judge Susan Bryant-Deason issued a preliminary injunction that required ITV to restore some control over the operations of Gurney Productions to the Gurneys. An appellate court reinforced that decision in an April ruling. The Gurneys at that time returned to the Los Angeles-based company they had been locked out of, but the sides have still been tussling over access to bank accounts connected to the company and the Gurneys’ ability to contact network TV executives, among other issues.

In May, the Gurneys filed a motion to hold ITV in contempt. At a hearing on Friday, Bryant-Deason ruled that the contempt motion was moot but after oral arguments she issued sanctions detailing violations by ITV America of the Gurneys’ contractual rights to operate their company.

The sanctions spelled out violations including granting the Gurneys less than $500,000 in development funds, hindering the Gurneys’ ability to hire and fire employees and delaying the Gurneys’ access to the company email server and financial documents. The judge also cited a communication between Deirdre Gurney and ITV Studios president Brent Montgomery over the production location of the upcoming Discovery Channel special “Lost Cage,” set to air next month as part of the annual “Shark Week” event.

In an email, Montgomery threatened Deirdre Gurney “that he would cancel the deal with Discovery for ‘Lost Cage’ if the Gurneys would not agree to have the show finished in New York,” the judge wrote, citing it as evidence of Montgomery’s “interference with Gurney’s rights to manage day-to-day business and communicate with the television networks.”

Michael Weinsten, attorney for the Gurneys, heralded the sanctions as a win for his clients that “could not be more clear and could not have come too soon,” he said. “The fact that the Court specifically called out the CEO of ITV America, Brent Montgomery, as having interfered with the Gurneys’ ability to do business is telling and perhaps best demonstrates how these folks got into litigation in the first place. We will hold ITV and its counsel to their promise in Court that there will be no further violations going forward. The Gurneys may now proceed, unhindered, in the development and sale of a fantastic slate of unique programming that made this company great in the first place.”

ITV America characterized the ruling as dealing with minor issues as underscored by the fact that the judge suspended payment of the fines. Moreover, ITV said Montgomery’s actions were an effort to save the “Lost Cage” project as Discovery insisted it be produced in New York.

ITV asserted that the Gurney team mounted a “failed effort” to pursue a contempt charge, while the Gurney camp maintained that they sought the sanctions rather than a contempt charge to avoid the time and expense of a full-blown contempt hearing.

“Today’s court order, with which ITV will comply, is the result of the Gurney’s failed effort to have ITV held in contempt of court. After ruling against such consideration, the court imposed modest sanctions and then ordered them suspended,” ITV America said in a statement. “The specific violation citing Brent Montgomery’s email of ‘interference’ is ironic, as he was simply relaying the exact message he received from a network in order to save a show for Gurney Productions, which was in danger of going away due to a location issue. ITV continues to focus with total commitment on the trial phase of this case during which time a jury will see what we believe is a wealth of evidence of the Gurneys’ outrageous and illegal behavior, and their massive fraud against the Company, which includes creating a ‘fake’ company – Snake River Productions – in a bid to divert business opportunities to themselves, artificially inflating their distributions and the value of their minority stake, and deceiving ITV about the Company’s financial health. We are anxious to have our case heard on the merits.”

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