A spokesman for Gurney Productions, which is part of ITV Studios-owned ITV America, said in a statement that the firm had been “left with no alternative but to terminate” the employment of Scott and Deirdre Gurney following a meeting with the pair.
According to court papers seen by US trade outlets, the Gurneys created had secretly formed a production company, Snake River Productions, after selling their original business to UK broadcaster ITV for US$40 million.
The ITV complaint alleges this allowed the pair to “misappropriate the Company’s corporate opportunities for themselves and to artificially inflate the Company’s EBITDA” – effectively generating profits through production work at the expense of ITV.
Furthermore, the complaint claims the Gurneys “sought to defraud ITV by securing a substantially higher payout for themselves and their closely held company, Little Win, which owns the shares in Gurney that ITV does not.
The Gurneys had agreed not to compete with ITV as part of the original sales agreement, but had sold ITV international distribution rights to Discovery Channel factual series Northern Territory to Snake River for US$3.6 million without the knowledge of the Gurney board and without disclosing they were behind the prodco.
ITV is seeking to claim punitive damages, at least US$850,000 in expenses repayment and an injunction to recover all ITV assets and works created by ITV employees working illegally for Snake River.
The development comes after an internal investigation that initially ended in the Gurneys being placed on a short-term leave.
Following the exit, ITV has named producer Craig Armstrong as interim CEO of Gurney with “the full ground support of ITV America’s senior team”.
Armstrong will remain co-chief executive of 5×5 Media with Rick Ringbakk.
“It’s very much business as usual and our brilliant production team remains focused on making and delivering great shows,” said Armstrong.
Gurney Productions biggest hit, Duck Dynasty, was recently cancelled by US cable channel A&E.
Scott and Deirdre Gurney could not be reached for comment.