Simon Fuller Eyeing Fraud Claims Against 'American Idol' Owner

Simon Fuller - Publicity - H 2016
Andrew Macpherson/Courtesy of XIX Entertainment

Simon Fuller - Publicity - H 2016

Simon Fuller, the creator of American Idol and an executive producer on So You Think You Can Dance, is investigating potential claims against Core Media Group, the rights-holder of those shows.

In April, Core filed for Chapter 11 bankruptcy after Idol's final season aired and Fuller made a multi-million-dollar payment demand. The prospect that Fuller could commence winding-up proceedings on Core affiliate 19 Entertainment in the U.K. caused Core to move quickly, and since then, the debtor has been working with creditors on a plan of reorganization to satisfy nearly $400 million in outstanding debt and get the reality television producer back on its feet.

On Tuesday, Fuller made his biggest move in bankruptcy court to date, bringing an ex parte motion for an order authorizing examination of AOG Entertainment and its Core affiliates.

Fuller now asserts a claim worth more than $10 million thanks to his long-term creative services agreement that provides him profit shares of Idol and So You Think You Can Dance. He cites "intimate knowledge" of the debtors operations and alleges that 19 Entertainment has "received little, if any, benefit from the incurrence of such debt."

Fuller raises the prospect of bringing claims for actual and constructive fraudulent transfers, equitable subordination and disallowance, unjust enrichment, breach of fiduciary duty and aiding and abetting breach of fiduciary duty.

"Upon information and belief, the Debtors made certain material misstatements in connection with the UK Audit regarding the Debtors’ solvency, which may impact fraudulent conveyance and other claims," adds his motion pushing for authorization to look further into the debtor's assets and transactions.

More immediately, Fuller, who says he was left off the Unofficial Committee of Unsecured Creditors despite indicating interest in serving as a member, could be priming a challenge to confirmation of the reorganization plan. In court papers, he adds, "If the Debtors want to expedite their exit from these Chapter 11 cases, then there must be a concomitant obligation of the Debtors to provide complete and expeditious access to documents and information necessary to evaluate claims and causes of action that may significantly impede the Debtors’ ability to confirm a plan."

Core gave The Hollywood Reporter this statement: "After extensive investigation and constructive negotiations, CORE Media is pleased with the agreement it successfully reached with its official committee acting on behalf of the unsecured creditors. Mr. Fuller’s attempt to circumvent the process and disregard the work of the official committee is disappointing. CORE Media remains focused on its upcoming plan confirmation and the swift completion of its restructuring."