7:29pm PT by Ashley Cullins
Bill Nye Says Disney Shorted Him Millions in New Fraud Lawsuit
Bill Nye the Science Guy says he's been shorted millions of dollars thanks to unscrupulous accounting, according to a lawsuit filed Thursday in Los Angeles County Superior Court.
Nye is suing Disney, ABC, Buena Vista and Touchstone, along with several other subsidiaries.
Nye claims he and several partners developed the children's series and are entitled to half of the show's net profits under their deal with Buena Vista Television. Of that 50 percent stake, Nye gets a third, with his partners splitting the other two-thirds — giving him 16.5 percent of 100 percent of the net profits. But, according to the complaint, the companies have been misclassifying revenues and expenses in violation of their agreement.
Nye says an "accounting error" in 2008 first made him suspicious of BVT's royalty calculations and after years of "futile negotiations" to obtain the corresponding records and get an explanation for the error he was forced to hire an external auditor.
In 2014, Nye sent a formal notice of his intent to audit and was told Disney was "backlogged with audits" and he'd have to wait in line — potentially three to four years — before commencing his audit. It finally began in May 2016, but Nye says the defendants failed to produce documents including its license agreements with Netflix and Apple and its sales income from its websites.
"Nevertheless, even in the absence of these essential documents, even without the ability to fully examine the accounting and related records of the Defendants ... the Auditor identified hundreds of thousands of dollars in underreported payments owed to Mr. Nye," writes attorney Charles Rainey in the complaint. Upon further analysis, the auditor has increased that figure to no less than $9.3 million.
The auditor, according to the complaint, found that BVT applied incorrect rates for distribution fees, mischaracterized revenues, didn't report royalties and improperly deducted foreign taxes.
"The defendants, and each of them, have engaged in an ongoing, deliberate conspiracy to decive Mr. Nye and the BNSG Owners, and deprive them of their rightly owned share of the Net Profits from the BNSG series and derivative works," writes Rainey.
Under their deal, BVT could pay Nye less for "video device" income if it used an affiliated entity to manufacture the devices, which he says were defined as audio visual cassettes, video discs or any similar devices embodying the series.
"In further breach of the BVT Agreement, BVT characterized its license of streaming rights to Netflix as a Video Device sale manufactured by an affiliated entity, wrongfully calculating the Gross Revenue at just 20% (as opposed to 100%), thereby paying Mr. Nye one fifth (1/5) of what he was actually owed," writes Rainey. (Read the full complaint below.)
Nye says Disney and its affiliates unjustly enriched themselves to the tune of $28 million. He is suing for fraudulent concealment, fraudulent inducement, breach of contract and breach of fiduciary duty, among other claims. Nye is asking the court to order an accounting of the money he's owed and is seeking compensatory and punitive damages, plus disgorgement of any profits related to the alleged fraud.
A representative for Buena Vista Television sent The Hollywood Reporter a statement Friday afternoon in response to the complaint: “This lawsuit is a publicity ploy and we look forward to vigorously defending it.”
Aug. 25, 4:45 p.m. Updated with a statement from Buena Vista Television.