$100 Million Demand for Fox Mobile Deal

     LOS ANGELES (CN) – An executive who tried to buy Fox Mobile Group sued his former partners for $100 million, claiming they used his “expertise and contacts” to land the company for themselves.
     Aidan Foley and his company AF Double Eagle sued Elliot Aintabi and his son Jason Aintabi, and the company Foley claims they formed to evade litigation, Jesta Digital, in Superior Court.
     News Corp., which initiated the sale of Fox Mobile, which sells ring tones, video and other mobile content, is not a party to the lawsuit.
     U.S. District Judge Dale Fischer this month dismissed without prejudice Foley’s federal complaint against the Aintabis because Foley could not establish their citizenship.
     In his new complaint, Foley, who says he has two decades of experience as an entertainment industry executive, claims Fox Mobile Group in October 2009 offered him the chance to buy the company in an “invitation only” bid.
     Foley says he entered into a nondisclosure agreement with Fox’s parent company News Corp., then made agreements with a group of “hand-picked” investors to protect Double Eagle’s right to buy Fox Mobile.
     He claims that Elliot and Jason Aintabi were part of that select group. They signed a confidentiality agreement, or non-circumvention agreement, with Double Eagle in late 2009, Foley says.
     “The Aintabis had neither the right nor the ability to purchase Fox Mobile on their own; the non-circumvention agreement expressly prohibited it,” according to the complaint.
     Foley says that although Jesta Group was part of that agreement, it was not a legally formed company at that time.
     The Jesta Group was “created after-the-fact” one year later, so the Aintabis could duck liability for defrauding him, Foley claims in the complaint.
     He calls the Fox Mobile deal a “once-in-a-lifetime opportunity,” and says he hired accountants, bankers, lawyers and industry experts to review Fox Mobile’s business and gain insight on other bidders.
     “Defendants did not perform the due diligence and did not assemble the teams to review the viability of Fox Mobile as an acquisition target,” he says in the complaint. “Defendants did not even know the company was for sale before plaintiffs disclosed it to them. Plaintiffs did this work.”
     But after the Aintabis promised financing for the deal, they breached the confidentiality agreement by going behind his back and buying Fox Mobile in late 2010, according to the complaint.
     “Defendants lied to Foley about making him CEO of the business while they schemed to buy Fox Mobile on their own,” the complaint states. “Defendants strung plaintiffs along for months to buy time for them to collect the confidential information they needed – e.g., the due diligence, the business plan and the contacts – to close the deal without plaintiffs.”
     Foley adds: “Defendants waited until the non-circumvention agreement expired to spring their trap, thinking this would somehow insulate them from liability (it does not).” (Parentheses in complaint.)
     Foley demands $100 million in damages for breach of contract, promissory fraud, concealment, intentional misrepresentation, constructive fraud, and aiding and abetting fraud.
     He is represented by Louis Miller of Miller Barondess.
     Jesta Digital did not immediately respond to an emailed request for comment.

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