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LFP Files $20 Million Counter Claim Against Giant Mobile

LFP Files $20 Million Counter Claim Against Giant Mobile
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May 17, 2006 9:17 AM PDT    Text size: 
BEVERLY HILLS, Calif. — Hustler parent company Larry Flynt Publications Inc. has filed a cross complaint against Santa Monica, Calif.-based Giant Mobile, which earlier this year filed a $23 million suit against LFP.

LFP is seeking $20 million in damages and an unspecified amount in punitive damages.

Hustler initially struck a deal with Giant to distribute mobile content for Hustler that included adult-themed gambling and puzzle games, video clips, streaming video, chat services and screensavers across three continents.

Michael Klein, president of Hustler.com parent company LFP Broadcasting/LFP Internet Group, who also is named in the suit, said LFP elected to terminate its license agreement with Giant after conducting an audit of Giant’s books and records.

In April, Giant announced that it had filed multiple claims against LFP for breach of contract and interference with contractual relations. According to lawsuit, LFP reneged on its two-year-old agreement with Giant in order to cut a better deal with another company.

The parties earlier decided to settle the initial lawsuit with a private arbitration organization called JAMS, which provides retired trial judges as arbitrators in business disputes.

Klein said LFP had tried to settle the matter amicably before filing the countersuit.

“LFP did its due diligence, and it is the company’s position that Giant Mobile was in default of our agreement in various areas,” Klein said. “When it became clear that these issues could not be resolved, we took action to terminate the agreement. It is LFP’s belief that this position will be vindicated at the arbitration between the parties.”

Subsequent to the termination of its licensing agreement with Giant, LFP negotiated a new licensing deal with mobile entertainment company Mobival covering mobile distribution in Europe, Central America and South America.

Klein said the company also is looking to expand its mobile service into markets not covered by its licensing agreement with Mobival.

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