Phone Hacker Sues Rupert Murdoch's News Corp. Over Legal Fees

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Glenn Mulcaire says that the entertainment giant breached a contract when it withdrew a guarantee to indemnify him against legal cost, but the company says his claims will be "vigorously contested."

NEW YORK - Glenn Mulcaire, a private investigator who is a key figure in the News Corp. phone hacking scandal, has filed a lawsuit against Rupert Murdoch's entertainment conglomerate, the Wall Street Journal reported.

In the suit, Mulcaire, who was on the shuttered News of the World tabloid's payroll, claims the company's U.K. newspaper unit breached a contract when it recently decided to stop paying his legal fees, according to the paper. Filed in U.K. High Court, the Mulcaire lawsuit says that News Corp. agreed in June 2010 to protect him against legal costs and damages, but last month terminated that guarantee.

Mulcaire got a six-month prison sentence in 2007 for phone hacking and currently faces a related criminal probe and civil lawsuits.

A spokesman for News Corp., which also owns the Journal, could not immediately be reached for comment. The Journal cited a representative of its U.K. newspaper unit News International as saying that  Mulcaire's claim would be "vigorously contested."

The Mulcaire lawsuit makes the investigator the latest former News Corp. employee or ally to have had a falling-out with the media conglomerate. Former legal advisers and a former News of the World editor criticized News Corp. in evidence published earlier in the week by a parliamentary committee that is looking into the phone hacking allegations.

Meanwhile, Bloomberg News reported that News Corp. president, COO and deputy chairman Chase Carey and CFO David DeVoe are holding conversations with institutional investors, such as the California State Teachers’ Retirement System, about corporate governance, succession, family control and other concerns of Wall Street people and critics.

“Calstrs is involved in the engagement process, which includes sending letters, holding conference calls and meetings, with News Corp. management,” a spokesman for the California teachers retirement system told Bloomberg.