Fox Mobile Sale Triggers $100 Million Lawsuit
An executive says that he recruited the individuals who bought the company from News Corp. then was pushed aside.
Aidan Foley, an entertainment industry executive who once served as chief executive at Kodak's digital entertainment division, has filed a $100 million lawsuit that alleges he was cut out of a deal to acquire Fox Mobile Group from News Corp.
According to a complaint filed Monday in Los Angeles Superior Court, Foley was contacted and invited in 2009 to bid on Fox Mobile, which had plans to develop an on-demand, premium-content video streaming company along the lines of Hulu for mobile platforms.
As the CEO of Double Eagle, Foley and his company signed an NDA to participate in the confidential acquisition process, and Foley says he began scouting around for investors to contribute capital for the purchase.
He says he lined up Elliot Aintabi and Jason Aintabi, who controlled the Jesta Group. In 2010, Jesta announced the acquisition of Fox Mobile, but without Foley's participation.
Foley is now suing Jesta for breach of contract, fraud, concealment and misrepresentation.
Foley says the Aintabis signed a "Non-Circumvention Agreement" that allegedly was intended to protect Double Eagle's right to purchase Fox Mobile. The plaintiff says he worked on the deal for more than a year, developed a plan to make the company profitable and developed relationships with News Corp. investment bankers responsible for managing the sale.
"Foley saw the Fox Mobile purchase as a once-in-a-lifetime opportunity," says the complaint. "He poured his energy, resources and time into the project."
But the Aintabis are said to have stopped communicating with him in late 2010, and despite previous assurances that they would purchase Fox Mobile with him and install him as the company's CEO, it never happened. According to the lawsuit, "Defendants strung Plaintiffs along for months to buy time for them to collect the confidential information they needed -- e.g., the due diligence, the business plan and contacts -- to close the deal without Plaintiffs."
The plaintiff is represented by Skip Miller at Miller Barondess.
Jesta Group said it wouldn't comment on pending litigation.
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