SQUIRE PATTON BOGGS (US) LLP Michael W. Kelly (State Bar # 214038) michael kelly@squirepb.com Daniel H. Wu (State Bar #198925) daniel wu@squirepb.com Maria A. Nugent (State Bar # 306074) maria.nugent@squirepb.com 275 Battery Street, Suite 2600 San Francisco, California 94111 Telephone: +1 415 954 0200 Facsimile: +1 415 393 9887 SQUIRE PATTON BOGGS (US) LLP. John A. Burlingame (pro hae vice pending) john.burlingame@squirepb.com 2550 M Street, NW Washington, D.C. 20037 Telephone: | +1 202 457 6000 Facsimile: +1 202 457 6315 Attorneys for Plaintiff ITV Gumey Holding Ine. HOGAN LOVELLS US LLP Paul B. Salvaty (State Bar # 171507) aul.salvaty@hoganlovells.com Boopak Nourafehan (State Bar # 193379) poopak.nourafchan@hoganlovells.com 1999 Avenue of the Stars, Suite 1400 Los Angeles, California 90067 Telephone: "+1 310 785 4600 Facsimile: +1 310 785 4601 Attorneys for Plaintiff Gumey Productions, LLC SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES CENTRAL JUDICIAL DISTRICT ITV GURNEY HOLDING IN' Case No. GURNEY PRODUCTIONS, LLC, COMPLAINT FOR DAMAGES AND Plaintiffs, INJUNCTIVE RELIEF v. SCOTT GURNEY, an individual; DEIRDRE GURNEY, an individual; and DOES 1-100, inclusive, Defendants. COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF 1089. 2863/3/aMecas9 10 WW 12 13 14 18 16 18 19 20 21 2 23 24 26 27 28 STATEMENT OF THE CASE 1. Plaintiffs ITV Gurney Holding Inc. (“ITV”) and Gurney Productions, LLC (“Gurney Productions” or “the Company”) (collectively, “Plaintiffs") bring this action against defendants Scott and Deirdre Gurney (collectively, the “Gumeys”), Co-Chief Executives, minority members, and directors of Gurney Productions, LLC (“Gumey Productions” or “the Company”), Through an internal investigation, Plaintiffs have uncovered overwhelming proof that the Gurneys breached their legal and contractual obligations to Plaintiff in numerous respects and have inflicted severe harm on ITV and the Company, thereby necessitating this lawsuit. 2. After the Gumeys sold a majority interest in the Company to ITV and promised, among other things, not to compete with the Company while they were employed by the Company, the Gumeys secretly formed a new production company that they owned and controlled, Snake River Productions, LLC (“Snake River”). They formed Snake River as part of an unlawful plan to misappropriate the Company’s corporate opportunities for themselves and to artificially inflate the Company's EBITDA. By engaging in these wrongful activities, the Gurneys sought to generate profits for themselves at the expense of the Company and ITV and also sought to defraud ITV by securing a substantially higher payout for themselves and their closely held company, Little Win LLC (“Little Win”) when ITV bought them out. 3. When ITV and the Company discovered that the Gurneys had engaged in wrongful conduct with respect to Snake River, they commenced an investigation that confirmed the Gurneys’ impropriety and self-d ling with respect to Snake River and also uncovered additional wrongful and unlawful act including but not limited to the Gurneys’ poaching of Company employees for their competing business, their improper use of Company resources for their personal benefit, their misappropriation of Company funds, unauthorized distributions to Scott Gurney, and numerous misrepresentations and active concealments by the Gureys to the Board regarding all of the above. By engaging in these wrongful actions, the Gumneys breached their fiduciary and employee duties of COMPLAINT FOR DAMAGES AND oe INJUNCTIVE RELIEFcare and loyalty, breached the express terms of their Executive Employment Agreements, breached their obligations under an Amended and Restated Operating Agreement with the Company (the “Operating Agreement”), and committed fraud, 4, The Company terminated the Gurneys’ employment for good cause on December 8, 2016, pursuant to the terms of the parties’ Agreements. Plaintiffs now bring this action to enjoin the Gurneys from continuing to engage in these unlawful activities and to recover all appropriate and available damages and relief. PARTIES, JURISDICTION, AND VENUE 5. Plaintiff ITV is a corporation formed under the laws of Delaware with its principal place of business in Burlingame, California, Plaintiff, the Company, is a limited liability company formed under the laws of the State of California with its principal place of business in Los Angeles, California, The Company is comprised of the following members: IT’ ‘cott Gurney; Deirdre Gurney; and Little Win (collectively, “the Company Members”). All of the Company Members are citizens of California. The Company develops, produces, promotes, and markets reality-based programs, whether for television or other broadcast. The Company has content for various networks such as A&E Networks and Discovery Channel (“Discovery”). The Gumeys, directly or through. other entities they own or control, control Little Win. Snake River is a limited liability company formed under the laws of the State of Wyoming in August 2016 at the direction of the Gumneys and without any disclosure to the other the Company Members. Scott and Deirdre Gurney control and are the beneficial owners of Snake River. 6. This Court has personal jurisdiction over Defendant Scott Guney because he is a citizen of California and resident of Los Angeles County. 7. This Court has personal jurisdiction over Defendant Deirdre Gumey because she is a citizen of California and resident of Los Angeles County. 8. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants Does | through 100, inclusive, are unknown to Plaintiffs ITV and the Company, who therefore sue the defendants by such fictitious names. Plaintiffs COMPLAINT FOR DAMAGES AND oe INJUNCTIVE RELIEF ros. 7p amenicas