Television and radio have always been at odds, but usually the battles are between companies, not within them.
Not even six months after its acquisition of Imagine Radio, however, MTV Networks terminated and then sued its founders in an attempt to stifle their efforts to form another tech startup.
Imagine Radiofounders Rotem Perelmuter and P. Michael Briseno filed a counterclaim Thursday in New York State Supreme Court, alleging fraud and invasion of privacy in response to a lawsuit filed by Viacom's MTV Networks last week.
When MTVN acquired Imagine Radio's customized Internet radio technology last February, it was projected to be an integral part of the media giant's new SonicNet Web site. But now it appears the technology will float in big-media takeover limbo as the litigation is expected to drag on for some time
Among other things, the countersuit alleges that MTVN gave Perelmuter permission to pursue a startup venture, and that these activities couldn't have interfered with his duties after the company was acquired by MTVN because he didn't have any.
The counterclaim also seeks to ensure the payments due to Perelmuter and Briseno from the purchase of Imagine Radio.
MTVN had filed a preliminary injunction against the Imagine Radio founders in order to prevent the group from pursuing its new business venture. On Friday, Perelmuter's lawyers filed a memorandum in opposition to the injunction, which will be reviewed in a New York court next Wednesday.
"... the success of the technology industry has been fueled by liberal competition law which says you can't stop an employee from working for a competitor, except to protect trade secrets," said Annette Hurst, a San Francisco attorney representing Perelmuter. "California depends on letting its employees migrate freely, taking skills and knowledge with them."
The memorandum, which overlaps with points in the countersuit, says that MTVN "trumped up these charges of misconduct" and reneged on promises made as part of the acquisition. It also details the salty negotiations that led up to the acquisition last February.
The court document alleges that when Perelmuter tried to back out of the deal, Mark Rosenthal, President of MTVN, "alternatively threatened and cajoled Mr. Perelmuter to complete the deal."
A short time after the discussions Imagine Radio agreed to the deal and was acquired in February for US$14.5 million. As part of the agreement, MTVN hired the two Imagine Radio founders as chief strategist and chief technology architect for MTVN's SonicNet music site.
Imagine's memorandum also alleges that Rosenthal promised that Perelmuter "would continue running Imagine Radio and that he would be MTVN's 'man' for Internet strategy so long as he agreed to the acquisition." However, according to Hurst, MTVN backed out of that agreement after the acquisition, systematically marginalizing the Imagine employees until they had virtually nothing to do.
