The legal battle over the fate of “Duck Dynasty” producer Gurney Productions has intensified in Los Angeles Superior Court.
An appellate court ruling last week restored ITV’s right to bar Scott and Deirdre Gurney from serving as CEOs of the company. But the ruling affirmed other elements of a lower court’s decision that went largely in favor of the couple, including upholding the decision that the Gurneys still have the legal right to serve as board members of the company.
ITV acquired 61.5% of Gurney Productions for about $40 million in 2012. The relationship between the Gurneys and ITV deteriorated into lawsuits late last year when ITV accused the couple of accounting fraud and other transgressions. The Gurneys shot back by accusing ITV of masterminding a scheme to buy out the remaining 38.5% of the company on the cheap.
The Dec. 5 appellate ruling reversed the lower court’s decision that the Gurneys had the right under the company’s operating agreement with ITV to remain CEOs despite the legal allegations. It’s unclear if ITV has taken any steps to bar the Gurneys from running day-to-day operations at the Los Angeles-based company. The Gurneys were ousted in December 2016 but regained their access to the Los Angeles-based production banner in Marc.
Meanwhile, the discovery process continues on ITV’s lawsuit, filed in December 2016, and the Gurneys’ counterclaim. Superior Court Judge Susan Bryant-Deason, in her ruling on a recent ITV motion to have portions of the Gurney’s cross-complaint tossed out, has indicated she’s leaning toward the Gurneys’ interpretation of events. In her Nov. 5 minute order, Bryant-Deason described the key Dec. 5, 2016 board meeting, where ITV executives confronted the Gurneys with allegations of financial impropriety, as “an ambush.”
ITV maintains the Gurneys set up a shell company to secretly buy rights to a canceled Gurney Productions show in a bid to inflate the company’s earnings in order to raise the price that ITV was contractually bound to pay for the remaining stake. The Gurneys assert that ITV came up with an elaborate scheme to accuse them of fraud in order to deny them a premium price for the rest of the company.
The minute order also cites the existence of an ITV memo dubbed “Operation Peking” (Peking being an oblique reference to “Duck Dynasty”) that the Gurneys allege is a checklist of steps that ITV planned to take in order to push them out and buy out the rest of their interest at a discount. The memo details a plan right down to “purchasing champagne for a positive outcome,” according to the minute order.
“This checklist demonstrates a triable issue regarding whether the cross-defendants acted in bad faith such that the litigation privilege would not apply,” Bryant-Deason wrote. She also noted that the Gurneys “have demonstrated a probability of prevailing on the merits” of the claim that they were improperly fired as CEOs by ITV.
ITV declined comment on the latest developments in the Gurney case. Gurney attorney Michael Weinsten characterized both rulings as a victory for his clients.
“In upholding major portions of the injunction against ITV, the Appellate Court has not only solidified the Gurneys’ position as managing board members, but has also affirmed a lower court finding that the Gurneys are likely to prevail on their substantial claims against ITV,” Weinsten said. “Despite ITV’s public posturing and misleading statements to the press, the facts in this case and court rulings have ITV running into a legal dead end.”
(Pictured: Deirdre and Scott Gurney)