Al Jazeera disputes Gore claims over television acquisition

Al Jazeera vehemently denied accusations of fraud and contract violation from former Vice President Al Gore and his co-founder Joel Hyatt regarding the $500 million purchase of Current TV. The Qatar-based network asserted these claims, filed in August 2014, were incorrect and potentially misleading. Al Jazeera argued that contractual safeguards in place during the January 2013 acquisition allowed it to seek compensation for liabilities arising from Current TV’s pre-acquisition operations.

Gore and Hyatt claimed Al Jazeera withheld $65 million in escrow funds belonging to the channel’s former shareholders and sought the release of these funds held in escrow under the acquisition agreement. Al Jazeera countered that this money was reserved to protect the purchaser against liabilities resulting from Current TV’s contractual obligations before the acquisition.

The broadcaster alleged third-party breaches of agreements dating back to Gore and Hyatt’s ownership. Al Jazeera America maintained its claims exceeded the escrow balance, arguing the purchase agreement permitted funds to be retained while these issues were resolved. Gore and Hyatt’s attorney, David Boies, accused Al Jazeera of trying to reduce the effective purchase price post-acquisition.

Boies alleged the former owners were seeking judicial intervention to recover funds they deemed rightfully theirs. Both sides agreed on the transaction’s legality but disputed each other’s interpretation of contractual protections. Under the deal, part of the purchase price was placed in escrow, intended to cover qualifying claims arising post-acquisition, with any leftover funds returning to the sellers.

Al Jazeera submitted five indemnification claims for alleged breaches of representations and warranties provided during the takeover, which Hyatt rejected. The broadcaster followed with counterclaims in September 2014, alleging Hyatt had breached the merger agreement by rejecting valid claims, seeking to prevent fund distribution until contractual matters were resolved.

Several allegations pertained to provisions in Current TV’s distribution agreements requiring favorable treatment for certain television distributors. Al Jazeera claimed the sellers misrepresented compliance with these terms. The Delaware court later examined the contractual language and obligations accepted by the parties, focusing on entitlement to legal expenses advancement rather than the original fraud allegations' merits.

A separate fee advancement and indemnification rights settlement occurred in September 2016, unrelated to the initial fraud claims. The acquisition enabled Al Jazeera to establish an American news operation using Current TV’s distribution channels, launching Al Jazeera America in August 2013. The American television arm was shuttered in April 2016 due to economic conditions and intense US television market competition.

Current TV, founded by Gore and Hyatt in 2005, transferred its distribution relationships and other assets to Al Jazeera upon sale, with former shareholders bound by contractual obligations stipulated in the merger agreement.