8:55am PT by Eriq Gardner
Al Gore Sues Al Jazeera for Withholding Money From Sale of Current TV
Current TV co-founders Al Gore and Joel Hyatt have launched a fraud and breach-of-contract lawsuit claiming that Al Jazeera is withholding money from its $500 million purchase of the cable news network.
The complaint was filed under seal in the Delaware Court of Chancery, but information provided reveals that the plaintiffs are seeking $65 million held in escrow.
Former U.S. Vice President Al Gore is being represented by David Boies, the attorney who memorably represented him in the 2000 battle over a Florida election recount.
"Al Jazeera America wants to give itself a discount on the purchase price that was agreed to nearly two years ago," said Boies in a statement. "We are asking the Court to order Al Jazeera America to stop wrongfully withholding the escrow funds that belong to Current's former shareholders."
According to Boies, the plaintiff is also filing the case under seal with some objection.
"We do not believe that our complaint should be sealed," he says. "However, despite being a news organization, Al Jazeera America has said that the full complaint should be kept from the public file. We have therefore filed the complaint under seal until the Court can resolve this issue. We expect that the Court will reject Al Jazeera America's argument."
Al Jazeera has responded to the lawsuit by saying the "money in the escrow fund is intended to indemnify Al Jazeera, and Al Jazeera's indemnification claims are more than the amount held in escrow."
The announcement that Current TV would be sold to Al Jazeera came in January 2013. It was believed at the time that the Qatari royal family, which owns Al Jazeera, was most interested in attaining Current's favorable distribution deals with cable and satellite TV providers. However, since the deal was made, Al Jazeera America has faced litigation from AT&T and DirecTV. In both cases, Al Jazeera has fought hard to keep details of the lawsuits under wraps.
Al Jazeera America also was dropped by Time Warner Cable for a time, but eventually returned to that service.
When launching, Al Jazeera America went on an aggressive hiring spree. However, its ambitions have been dampened by weak ratings, sometimes falling below Current's. Nevertheless, the cable news network has made waves, most recently in Ferguson, Missouri, where it called for an investigation into media mistreatment after seeing its reporters in the vicinity of tear gas. The network called that an "egregious assault on freedom of the press."
When Gore sold Current to Al Jazeera, the climate change activist faced tough questions from the likes of Comedy Central host Jon Stewart for choosing to sell to an oil-rich Middle Eastern nation.
"I'm proud of the transaction," Gore responded. "It's going to really be a positive addition to the U.S. media landscape."
After the sale, Gore was sued for not compensating a media consultant who allegedly came up with the idea for the distribution of an American version of Al Jazeera. The complaint alleged that the former veep was originally opposed to the deal but had a "change of heart."
The defendants beat the lawsuit, although not before having to give depositions in the case.
At the time the Current-Al Jazeera transaction was announced, word was circulated that Gore would continue to play an advisory role. But during a deposition, Hyatt testified, "We had indicated our willingness to serve on an advisory board, if they wanted us, but they never went ahead and constituted an advisory board, and we never served on one."
Hyatt also said that secrecy was a paramount consideration for Al Jazeera ("they made it quite clear the importance of confidentiality"), and that the deal was closed on Jan. 2, 2013, "because that's when Al Jazeera wired the money to the escrow fund," he said.
The former Current executive was also asked, "Are there any obligations left to — on behalf of either yourself or Mr. Gore to fulfill in the courts with the — that deals with Al Jazeera?"
He answered, "There are no obligations."
Aug. 20, 9:00 am: Updated with reaction from Al Jazeera America.