Gemstar-TV Guide International Inc. has sued an insurer, seeking to recover $50 million (euro42.3 million) in liability coverage the media and technology company claims it is due to help cover judgments stemming from lawsuits over inflated revenues.
In its complaint, filed in U.S. District Court in Los Angeles, Gemstar contends its coverage with National Union Fire Insurance Co. of Pittsburgh was paid through Oct. 10, 2002, the same year that an audit revealed Gemstar had overstated company revenue.
The coverage should apply to claims brought over Gemstar’s accounting practices against its directors or the company itself, Gemstar claims.
But the insurer, a division of American International Group Inc., has “neither denied coverage nor provided it” for claims related to the accounting issues, the lawsuit states.
An AIG spokesman did not immediately return a call for comment late Thursday.
Settling shareholder lawsuits over the inflated revenues has cost Gemstar more than $70 million (euro59.2 million). The company has also paid a $10 million (euro8.46 million) fine to the Securities and Exchange Commission.
The SEC also filed fraud charges against two former Gemstar executives — CEO Henry C. Yuen and ex-financial chief Elsie Leung –claiming they overstated company revenue by $248 million between March 2000 and September 2002 to boost the company’s stock.
The SEC’s civil case against Yuen and Leung — both of whom were forced out of their posts in October 2002 — is pending.
The company publishes TV Guide magazine and licenses its interactive program guide to cable operators and to consumer electronics companies. It is partly owned by News Corp.
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