Aereo Settles Broadcasters’ Claims for Penny on the DollarErik Larson
Aereo Inc. agreed to pay CBS Corp. and other broadcasters a total of $950,000 to resolve copyright claims totaling more than $99 million as the online-TV service backed by Barry Diller seeks to wind down in Chapter 11.
The deal to pay less than a penny on the dollar would resolve all litigation among the companies, including Aereo’s lawsuit accusing the broadcasters of intentionally botching its asset auction, according to a filing Monday in federal bankruptcy court in Manhattan.
The deal, backed by all the broadcasters, would leave Aereo with $811,000 to pay non-broadcast creditors with claims totaling $7.5 million, the company said. A hearing to approve the accord was set for May 7.
“In the absence of settlement, there is a likelihood of expensive, protracted litigation that will likely consume the debtor’s limited remaining funds,” Aereo said in the filing.
Under the deal, CBS’s claims against Aereo will total $27.8 million while Walt Disney Co.’s ABC will have a claim of $17.7 million, according to the filing. 21st Century Fox Inc.’s claim is more than $26 million.
The broadcasters joined Aereo in arguing in court papers that the company has limited funds that shouldn’t be wasted on a court fight. Bruce Keller, a lawyer for ABC who has spoken in court on behalf of all of them, didn’t immediately return a phone call for comment on the accord.
The startup filed for bankruptcy in November after the U.S. Supreme Court said its TV service violated programming copyrights. The June ruling rang the death knell for Aereo, handing a victory to the broadcast giants.
Aereo in February sold its patents, hardware and other assets piecemeal for less than $2 million -- a fraction of what it sought -- after a key bidder backed out. Aereo had said it expected bidding of $4 million to $31.2 million, which would have provided more cash to pay creditors.
The company accused the broadcasters in a lawsuit in bankruptcy court of derailing the auction with onerous demands to stifle future use of the technology.
Aereo used tiny antennas to capture over-the-air television signals and stream programming to subscribers for $8 a month. The company didn’t get permission from the broadcast networks, which sued.
The case is In re Aereo Inc., 14-bk-13200, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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