Gemstar-TV Guide International announced Monday that arbitrators overseeing its dispute with former chairman and CEO Henry Yuen ruled in its favor and awarded the company a $93.6 million judgment.
The arbitrators ruled that Gemstar-TV Guide "properly terminated" Yuen in April 2003 because he had "breached representations and warranties made to the company" in connection with a November 2002 management and corporate restructuring, the company said.
Yuen is not entitled to any of the approximately $30.9 million set aside by the company as restricted cash for payment to him in connection with the restructuring, in which he was removed from the positions of chairman and CEO, the arbitrators said.
In addition, Gemstar-TV Guide was awarded a judgment of approximately $93.6 million, including $80.6 million in damages. Gemstar-TV Guide is also entitled to an additional judgment for its attorneys' fees and costs against Yuen. The company said it "intends to vigorously pursue collection of all of the amounts awarded."
"We are very pleased with the arbitrators’ ruling in this matter," Stephen H. Kay, Gemstar-TV Guide’s executive vice president and general counsel, said in a prepared statement. "It brings to a close an extended period of arbitration and litigation with Mr. Yuen. In addition, it is gratifying that Mr. Yuen has been held accountable for a sizable portion of the harm he caused the company and its shareholders during his tenure as chairman and chief executive officer."
The arbitrators also ruled that the patent-rights agreement between Gemstar-TV Guide and Yuen remains in effect until 2010, but the company is entitled to offset amounts owed to Yuen under that agreement against the $93.6 million judgment.
Last year, Yuen was found liable for securities fraud in a suit brought by the Securities and Exchange Commission. In May 2006, a U.S. District Court judge in Los Angeles ordered Yuen to pay $22.3 million in fines.
In April 2002, Gemstar -- then under Yuen's leadership -- disclosed that it had recognized $107.6 million in revenue from Scientific Atlanta, which was actually money Gemstar had hoped to eventually collect in a patent suit.