7:46am PT by Eriq Gardner
Discovery Accused of Taking Advantage of Financial Crimes to Steal TLC's 'The Little Couple'
After allegedly being the victim of an accountant who embezzled money and doctored books, reality show producer LMNO Cable Group claims in a new $7 million lawsuit that Discovery Communications used the situation to steal the hit TLC series The Little Couple, now in its ninth season, featuring a married couple living with skeletal dysplasia, more commonly known as dwarfism.
LMNO has produced other shows including Kids Say the Darndest Things for CBS, Guinness World Records for Fox and Behind Closed Doors for ABC. It also does other work for Discovery including 7 Little Johnstons, Unusual Suspects and Killer Confessions.
The company was left in dire straits, according to a complaint filed Wednesday in California federal court, as a result of an accountant who allegedly falsified records to hide hundreds of thousands of dollars in embezzled money. LMNO further claims that this accountant demanded more than $800,000 or else he would damage the company's reputation by taking the doctored books to its largest customer. LMNO says it reported to authorities this accountant, who allegedly tried to dispose of accounting records by throwing them in dumpsters.
"In its darkest hour, however, what LMNO did not count on was treachery," states the complaint. "Instead of standing by the side of its long-time business partner, Discovery saw an opportunity to enrich itself at LMNO’s expense. Working with, and using documents prepared by a criminal extortionist, Discovery chose this moment to manufacture bad faith claims surrounding the very books and records that it had received from a criminal in a scheme to steal The Little Couple television show from LMNO, and put LMNO out of business."
The complaint explains that Discovery asserted that LMNO had failed to maintain books and records for various shows and that it was being improperly charged. LMNO contends this is nonsense in light of Discovery paying a flat fee to LMNO for each episode ($127,035 per half-hour in the seventh season), which would not be adjusted up or down based on costs.
"Discovery’s actions were all designed to drum up the pretense of a contract dispute, so that Discovery could claim to 'terminate' the contracts and distance itself from LMNO," states the complaint. "On June 17, 2016, Discovery did exactly that: sending notices of termination on six different series, including The Little Couple, 7 Little Johnstons, Killer Confessions, Speaking for the Dead, Unusual Suspects and Hollywood & Crime. Tellingly, Discovery purported to terminate shows on which it had never even seen the books, shows that were newly in production for which current reports had not yet been made, shows that were finished and delivered four years ago, and shows on which it had refused to sign a written contract."
But LMNO says this was a "smokescreen" as Discovery "secretly began shooting new episodes of The Little Couple on its own more than a month ago as part of its scheme to take the show."
Actors on The Little Couple have allegedly been told not to communicate with LMNO.
The plaintiff, represented by attorney Stephen Mick, is suing Discovery on causes of action of copyright infringement, unfair competition, trademark infringement and breach of various contracts.
Discovery confirms that it has canceled contracts with LMNO.
"Discovery is a global content company committed to operating with integrity in all our business practices and we expect our business partners to live up to that same standard," a Discovery spokesperson said in a statement. "We understand that LMNO has issued a complaint against Discovery and while it’s not our practice to comment on ongoing litigation, we will vigorously defend against LMNO’s lawsuit."
The statement added, "We have worked with LMNO Productions for more than a decade on a number of series and specials that have aired across many of Discovery’s global networks. Together, our companies have enjoyed great success. At this time, we have decided to terminate certain of our contracts with LMNO, based on the results of a lengthy review of long-standing production agreements which revealed procedures and practices that did not respect Discovery’s contractual rights. We believe that at the heart of any enterprise is trust and mutual respect between commercial partners."