'Duck Dy­nasty' Pro­duc­ers Com­mit­ted Mas­sive Fraud and Self-Deal­ing, Law­suit Con­tends

Kuwait Times - - LIFESTYLE -

Deirdre and Scott Gur­ney, the pro­duc­ers of "Duck Dy­nasty," have of­fi­cially been ter­mi­nated by ITV fol­low­ing a fraud in­ves­ti­ga­tion, and a claim has been filed in Cal­i­for­nia Su­pe­rior Court. "Fol­low­ing a meet­ing with Scott and Deirdre Gur­ney, the Board of Gur­ney Pro­duc­tions has been left with no al­ter­na­tive but to ter­mi­nate their em­ploy­ment and file a law­suit in the Su­pe­rior Court of Cal­i­for­nia on the grounds of self-deal­ing, fraud­u­lent con­ceal­ment and breach of con­tract," ac­cord­ing to a state­ment from a Gur­ney Pro­duc­tions spokesper­son.

"As an­nounced on Mon­day, Emmy-win­ning pro­ducer Craig Arm­strong has been ap­pointed in­terim CEO of Gur­ney Pro­duc­tions and has the full ground sup­port of ITV Amer­ica's se­nior team. Un­der his lead­er­ship, all Gur­ney Pro­duc­tions shows and de­vel­op­ment will con­tinue to be pro­duced by the com­pany's strong team of pro­duc­ers. Arm­strong, along with his pro­duc­ing part­ner Rick Ring­bakk, is co-founder and co-CEO of 5x5 Me­dia, which con­tin­ues to op­er­ate as be­fore." "It's very much busi­ness as usual and our bril­liant pro­duc­tion team re­mains fo­cused on mak­ing and de­liv­er­ing great shows."

The Gur­neys sold a 61.5% stake in the com­pany to ITV in 2012 for $40 mil­lion, but re­mained co-CEOs of the firm. The suit al­leges that in Au­gust, the Gur­neys se­cretly set up a new com­pany, Snake River Pro­duc­tions. In Septem­ber, the new com­pany bought dis­tri­bu­tion rights to "North­ern Ter­ri­tory," a re­al­ity show, from Gur­ney Pro­duc­tions, ac­cord­ing to the law­suit. That trans­ac­tion-for $3.6 mil­lion-in­flated Gur­ney Pro­duc­tions' EBITDA, which had the ef­fect of ar­ti­fi­cially boost­ing the value of the Gur­neys' re­main­ing mi­nor­ity stake in the com­pany, the suit al­leges.

"Ev­ery dol­lar that the Gur­neys spent to pur­chase rights from the Com­pany through Snake River would have been paid di­rectly back to the Gur­neys sev­eral times over through dis­tri­bu­tions and un­der the terms of the Op­er­at­ing Agree­ment's buy­out pro­vi­sions," the suit claims.


In Oc­to­ber, the Gur­neys took a dis­tri­bu­tion from the old com­pany in the amount of $1.4 mil­lion, which the law­suit al­leges was the di­rect re­sult of self-deal­ing. At the Septem­ber board meet­ing, the suit claims that Deirdre Gur­ney dis­closed a higher-than-ex­pected EBITDA. The board queried her, fo­cus­ing in on the "North­ern Ter­ri­tory" rights sale. The suit al­leges that she pre­tended not to re­mem­ber the name of the com­pany that had ac­quired the rights. It was only af­ter the meet­ing that ITV dis­cov­ered that the rights had been sold to Snake River, and that the Gur­neys were the own­ers of Snake River, the suit al­leges.

This dis­cov­ery prompted ITV to launch an in­ves­ti­ga­tion. ITV dis­cov­ered that two em­ploy­ees-Josh Puga and Tara De­laney, who is Deirdre Gur­ney's sis­ter-had been trans­ferred to the pay­roll of Snake River, even though they still worked for Gur­ney Pro­duc­tions. That also had the ef­fect of in­creas­ing Gur­ney Pro­duc­tions' EBITDA, en­hanc­ing the value of the Gur­neys' mi­nor­ity stake, ac­cord­ing to the suit.

The law­suit also claims that the in­ves­ti­ga­tion found that the Gur­neys had charged hun­dreds of thou­sands of dol­lars in per­sonal ex­penses to the com­pany, in­clud­ing travel costs, mort­gage pay­ments, child­care pay­ments, gro­ceries, dues at the Man­hat­tan Coun­try Club, he­li­copter rides, boat ex­penses and pet sup­plies. The suit al­leges that the Gur­neys charged $542,000 in per­sonal ex­penses to the com­pany as of Septem­ber 2013. De­spite prom­ises to re­pay the per­sonal ex­penses in 2014, the com­pany was not re­im­bursed, ac­cord­ing to the suit. The suit al­leges that the Gur­neys re­peat­edly told the board that the ex­penses had been re­paid, and that the board only dis­cov­ered that the ex­penses re­mained un­paid in Septem­ber 2016.

The suit also al­leges that Scott Gur­ney took an im­proper $350,000 dis­tri­bu­tion from the com­pany in Jan­uary 2016, and the board only learned of it in Septem­ber. The Gur­neys could not be reached im­me­di­ately for com­ment. — Reuters


Cast mem­bers of Duck Dy­nasty in a pro­mo­tional pho­to­graph in Los An­ge­les.

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