It’s a drama-filled meltdown worthy of… well, reality TV. LMNO Cable Group, producer of numerous cable reality shows, claims in a new lawsuit that its accountant has been stealing from the company for years. The company also alleges that Discovery Communications took advantage of the situation to steal its top-ranked show, TLC’s “The Little Couple.”
Last week, Discovery notified LMNO that it was terminating its contracts for six shows, including “The Little Couple” and “7 Little Johnstons,” both of which feature stars with dwarfism. According to Discovery, this followed a lengthy review of its relationship with LMNO, “which revealed procedures and practices that did not respect Discovery’s contractual rights.”
LMNO counters that it was the victim of an extensive and long-running embezzlement scheme perpetrated by its former accountant. According to a federal lawsuit filed on Wednesday, LMNO claims the accountant falsified the company’s books in order to divert hundreds of thousands of dollars into his own pocket. When LMNO discovered the scheme last year, the accountant allegedly tried to extort the company for an additional $800,000, according to the lawsuit. If the company did not pay up, the suit claims that the accountant threatened to tell Discovery about the doctored books.
“LMNO chose to stand up for itself, and refused to pay this illegal ransom,” the lawsuit states. “Instead it reported the accountant to the authorities. In its darkest hour, however, what LMNO did not count on was treachery.”
LMNO contends that the accountant took the company’s doctored financial documents to Discovery and that Discovery then used them to manufacture a reason to dissolve its relationship with LMNO. LMNO claims that Discovery initiated a surprise audit of LMNO’s books, knowing that LMNO could not produce its books because they had been stolen. LMNO also claims that Discovery is now producing new episodes of “The Little Couple” on its own.
According to the suit, the accountant threw many of LMNO’s records in dumpsters, and also hired someone to mix up the records with other paperwork. A photograph included in the lawsuit appears to show seven large cardboard boxes of accounting records that were found in a storage unit.
LMNO has had to lay off employees since last week’s announcement, though it retains relationships with other networks.
“LMNO remains steadfast in our total commitment to defend our company and our reputation from false accusations and egregious actions,” the company said in a statement.
Discovery issued its own statement, in which it said it would aggressively defend against the LMNO lawsuit.
“We believe that at the heart of any enterprise is trust and mutual respect between commercial partners,” a Discovery spokesperson said.