(CN) - A Delaware judge ordered Al Jazeera America to pay most of Al Gore's attorneys' bills in its court battle against the former vice president over its buyout of Current Media.
Vice Chancellor Sam Glasscock III wrote in last week's Delaware Chancery Court opinion that the "matter before me here involves a twist" on similar cases filed in the court.
Usually in those cases, it is the former employer that resists paying an employee's attorneys' fees, but this case concerns the acquirer of the former employer being obligated to advance the attorneys' fees, according to Glasscock.
The legal dispute was started by Gore and former Current Media CEO, Joel Hyatt, when they sued Al Jazeera America Holdings II LLC and Al Jazeera International (USA) Inc., the U.S. media arms of Al Jazeera International, for refusing to release $65 million held in escrow following Al Jazeera's buyout of Current Media for $500 million.
Owned by the Qatari royal family, Al Jazeera International bought Current Media to gain entry into the U.S. television market in January 2013. The deal soured when Al Jazeera encountered problems with using Current Media's platform after AT&T and Time Warner refused to carry the channel, citing a change-of-ownership provision in the contract with Current Media.
Al Jazeera filed counterclaims against Gore and Hyatt, alleging breaches of representations and warranties concerning those distribution deals with AT&T, Time Warner and another third party.
Gore and Hyatt seek $1.7 million for fees and expenses related to defending against Al Jazeera's counterclaims.
"Because the counterclaims require Hyatt and Gore to defend actions taken while acting in their capacity as former officers and directors, plaintiffs argue that Al Jazeera is liable for the fees and expenses incurred thereby," the March 31 ruling states.
Al Jazeera argued during trial that Gore and Hyatt are not being sued as former officers and directors of Current Media but as former members of the company, and Hyatt as a members' representative of Current Media shareholders.
Al Jazeera hinges its argument on a "fee-shifting provision" in the merger agreement that does not provide for fee advancement, while Gore and Hyatt cite an advancement provision preserved in the merger agreement related to Current Media's operating agreement.
Glasscock noted that the "questions raised in this case largely turn on the interpretation of the merger agreement" between Current Media and Al Jazeera. According to the ruling, the arguments presented hinge upon the closely related legal rights of indemnification, or "fee-shifting" as it is commonly known, and advancement.
Glasscock wrote that "the fee-shifting provision ... does not conflict with the right to advancement for officers and directors," and that the parties "could have, but chose not to, exempt Hyatt from the right to advancement in his capacity as former officer and director in ... the same agreement."
"The fact that Hyatt is sued in his capacity as members' representative, therefore, does not displace his rights as a former officer and director as otherwise provided in the merger agreement. Accordingly, Hyatt (as well as Gore) is entitled to advancement as a former officer and director," the judge wrote. (Parentheses in original.)
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