(Reuters) - Al Jazeera on Tuesday rejected allegations from Al Gore and Joel Hyatt, the founders of Current TV, saying they were false and potentially misleading.
Al Jazeera acquired Current TV for an estimated $500 million in 2013. Gore and Hyatt filed a lawsuit against the Qatar, Doha-based company on Friday for fraud and material breaches of the acquisition.
Al Jazeera America said in a statement that Gore and Hyatt’s assurances of contract compliance were inaccurate and that third parties contend that Current TV breached its contracts while the group ran the channel.
The company said the Gore-Hyatt group promised to indemnify Al Jazeera if, after the sale, the company was sued for breach of any of these contracts while Gore and Hyatt ran the channel.
“Rather than indemnifying Al Jazeera as they were required to do, Gore and Hyatt have resorted to a preemptive lawsuit and lawyer-driven public relations maneuvers,” the company said in a statement.
The Gore-Hyatt group’s attorney, David Boies, said on Aug. 15 the group asked the court to order Al Jazeera America to “stop wrongfully withholding the escrow funds that belong to Current’s former shareholders”.
Al Jazeera said under the deal the sellers had set aside money in an escrow fund, which Al Jazeera would use if it became liable to pay damages or settle its contract dispute with a third party, the company added.
“The money in the escrow fund is intended to indemnify Al Jazeera, and Al Jazeera’s indemnification claims are more than the amount held in escrow,” the company said.
Al Jazeera used its acquisition of Current TV to kick start its efforts to launch a U.S.-based news channel to compete with the likes of CNN, MSNBC and Fox News.
The channel has struggled to gain traction in the United States and has low ratings.
Reporting By Subrat Patnaik; Editing by Saumyadeb Chakrabarty