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Investor Says Russian Billionaire Took It|For a Long Expensive Ride in TV Deals

MANHATTAN (CN) - An English media company says Russian billionaire Vladimir Gusinsky "asserted total control" of the Ukrainian station TVi after it invested $11.3 million on promises it would be an equal partner. Iota LP, based on the Isle of Jersey, says Gusinsky took over the station through self-dealing contracts with other companies he owns.

In its federal complaint, Iota says it became partners with Gusinsky's New Media Holding Company in IVL, the parent company of TVi, on April 14, 2008.

Each party owned 50 percent of the shares and had equal voting rights, but Gusinsky became the "indirect majority owner" because of self-dealing contracts he had the channel sign with his other companies, Iota says.

Iota says it never received a return on its investment, but Gusinsky grossed "millions of dollars." Gusinsky allegedly got more money from U.S. tax breaks that New Media Holding Company got for investing in the Ukraine.

Iota says Gusinsky also reaped excessive "licensing fees" that the Holding Company charged IVL, preventing it from getting content with competitive rates from third-party suppliers, the lawsuit says.

So total was Gusinsky's control that when a TVi employee made a suggestion about content, "the employee was told the TVi Channel was required to prefer content distributed by Gusinsky's Distribution Company," according to the complaint.

Iota says IVL was promised "premier" content, but this actually consisted of shows that Gusinsky already had broadcast on other channels. These included "CID (Criminal Investigation Department) 1 and 2," "Solo for a Handgun and an Orchestra," "The Age of Sagittarius 1 and 2," "Cop Wars 4" and other programs from the Gusinsky-owned station Teleclub, according to the complaint.

Iota says Gusinsky tripled the cost of these programs between 2008 and 2009, raised prices another 50 percent going into 2010 and overruled TVi management's objections to the increases.

Iota adds that when another channel offered him more money for the series "Mom, I'm in Love with a Serial Killer," Gusinsky pulled the show from TVi's programming and sold it to the competitor.

Iota claims Gusinsky even defrauded AIG of $20 million for a "minority" ownership interest in his Distribution Company, though this sum exceeded his own original investment.

Gusinsky allegedly designed the channel "with a policy of no growth," allowed only a "minimal advertising budget" and "limited the development of regional broadcasts" to keep TVi an instrument of his self-dealing.

The Distribution Company sued IVL in October in the Southern District of New York for failing to pay for content, but Gusinsky allegedly would not advise the channel how to respond to the suit.

Iota wants its $11.5 million back plus damages for breaches of fiduciary duty. Gusinsky and New Media Holding Company are the named defendants.

Iota is represented by John Moscow with Baker & Hostetler.

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