(CN) – A month after former Vice President Al Gore sued Al Jazeera over claims the satellite news provider is trying to renege on $65 million payments related to its $500 million purchase of Current TV in 2003, Al Jazeera is striking back with some claims of its own.
The parties are fighting over $65 million that is being held in escrow. According to David Bois, the lead attorney for Gore and Joel Hyatt, the former CEO of Current Media, the Qatar-based network “wants to give itself a discount on the purchase price that was agreed to nearly two years ago.”
Al Jazeera responded today be characterizing Gore and Hyatt’s action as “a sham lawsuit, larded with vituperative and irrelevant accusations, to block” contractually required indemnification.
It accuses the former vice president and his business associates of numerous “misrepresentations” regarding the health of the Current TV and its contractual relationships.
In a lengthy , nearly line-by-line response to Gore and Hyatt’s assertions, Al Jazeera says Gore and Hyatt assured it that Current was “in compliance with all of its existing contracts, that Current’s contracts could and would be validly assigned to Al Jazeera and not terminated when Al Jazeera took control.”
But audits it conducted after the purchase of the network revealed that Current was not in compliance with distribution agreements it had with Direct TV, AT&T and others, creating unforeseen liability issues of Al Jazeera.
Al Jazeera contends all of these issues arose while Gore and Hyatt were at the helm of the company.
But far galling to Al Jazeera is what it describes as Hyatt’s “failure” to get Time Warner Cable to carry the network.
“Plaintiffs agreed to indemnify Al Jazeera for liabilities, costs or expenses incurred by Al Jazeera as a result of Current Media’s failure to produce TWC’s written consent to the assignment of its distribution agreement as promised, and for 50 percent of liabilities, costs or expenses incurred as a result of the ‘termination, cancellation, discontinuance or nonperformance by AJ of TWC’s agreement to distribute AJE,” the network says.
It describes Gore and Hyatt at the time of the sale as “looking to cash out” what had been “only a small investment in Current” on their part.
“As they were desperately negotiating to sell the network to Al Jazeera, Gore and Hyatt gloated to each other about the ‘windfall’ they were to receive from the sale,” the network says.
Since it requested the indemnification it believes it’s due, Al Jazeera says Gore and Hyatt have refused to negotiate with it.”Instead, they gave Al Jazeera a 104-page draft complaint, most of which had nothing to do with the parties’ business dispute, in an attempt to grab all of the escrow lockbox funds for themselves.”
“Gore and Hyatt eventually fled a rambling, largely incomprehensible 143-page, 361-paragraph rant of a complaint. This Complaint was intended to grab headlines for Gore and Hyatt, not to place a controversy before this Court for decision,” Al Jazeera says. “It contains outright falsehoods, including fraud and bad faith claims as well as the false allegation that Gore and Hyatt had; serious reservations’ about selling their defunct company to Al Jazeera.”
Al Jazeera is seeking a declaratory judgment, directing that the money now held in escrow be paid to it in full. The network is also seeking unspecified damages.
AL Jazeera is represented by John L. Reed and Scott B. Czerwonka of Wilmington, Del., and Andrew L. Deutsch, Michael D. Hynes, and Jason D. Gerstein, of DLA Piper LLP in New York.
In a written statement, David Bois continued to blast Al Jazeera.
“Our complaint explains how Al Jazeera improperly tried to use our escrow funds to pay the distributors that it wants to carry its channel in the U.S. After trying to block our clients’ request that their entire complaint be made public, Al Jazeera has now responded by making false claims to defend its behavior. We are confident that we will prevail when the court hears our case.”
Christopher Lehane, the spokesman for Joel Hyatt and the former vice president also dismissed Al Jazeera’s claims, saying, “Given that Qatar’s Al Jazeera has now gone from a news organization that had been seeking to prevent news contained in the legal filings from being made public to a news organizations that is now fabricating news, is it any wonder that the channel is now failing to grow an audience? News is about trust and their filing, which we can demonstrably prove is built on factual misrepresentation and contains outright falsehoods, will further degrade whatever levels of trust Qatar’s Al Jazeera has as a respectable news organization in the U.S.”
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