Ozy Media owes its law firm $1.3 million: New York lawsuit

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Today's Show by Carlos Watson

Ozy Media CEO and co-founder Carlos Watson appeared on the Today Show after the New York Times broke a story about an impersonation scandal involving the chief operating officer. (Screenshot via Today Show)

Ozy Media has been sued over a bill worth nearly $1.3 million that its law firm claims it accumulated to deal with the aftermath of a bomb. New York Times exposure about the company.

Co-founded by CEO Charles Watson and operational director Samir Rao in 2013, Ozy Media takes the name of the poet Percy Bysshe Shelley Ozymandias, a sonnet about the fleeting nature of power and the powerful. Drawing inspiration from that verse, Ozy started out with an ambition to become one of the few media companies founded and run by people of color – and quickly found high-profile sponsors, reportedly spurred by an initial round of funding from Laurene Powell works🇧🇷 German media giant Axel Springer poured $20 million into the company the following year, and other big investors followed, including billionaire Marc Lasry and the Ford Foundation.

The company’s fortunes changed in October 2021, when then-Schedules media columnist ben smith reported a “weird” Zoom call that Ozy Media had with another potential investor: Goldman Sachs. According to the article, COO Rao apparently impersonated the voice of the YouTube Originals executive. Alex Piper on the call. Four people briefed on the meeting anonymously told the Schedules that the voice sounded like it was “digitally altered”. CEO Watson allegedly blamed the incident on Rao’s mental health crisis.

The article also described the start-up digital media company’s reports of high traffic as suspicious, “hype” or worse.

After the article, Ozy Media briefly closed and reopened, in what Watson described in the today’s program as the company’s “Lazarus moment”. The company has also had to deal with litigation and several federal investigations, which the lawsuit notes are both criminal and civil.

On December 22, 2022, his law firm Ford O’Brien Landy LLP (FOBL) filed a complaint with the New York County Supreme Court, alleging that Ozy Media’s legal bills increased over the year with no end in sight.

“When FOBL raised Ozy Media’s arrears with Mr. Watson or company representatives in telephone calls or video conferences, Mr. Watson and/or these representatives repeatedly urged the company to be patient until the company’s financial situation improved, at which time, they promised, the company would get to work and finally extinguish the large outstanding balances,” the complaint states. 16 pages. “But instead, Ozy Media’s debt to FOBL, far from being reduced, has steadily increased each month in 2022 to the present.”

According to the lawsuit, the company represented Ozy Media in the Eastern District of New York criminal investigation, the Securities and Exchange Commission civil investigation and two lawsuits in the Northern District of California.

Providing few details about these investigations, the lawsuit reveals that they involved mountains of paperwork.

“The company had multiple responsibilities, including strategy, communicating with the government, interviewing, and reviewing and producing over 27,000 documents, consisting of over 160,000 pages, in response to multiple subpoenas of government documents,” according to the complaint.

Ford O’Brien Landy LLP notes that it successfully defended itself against a lawsuit filed by one of Ozy Media’s investors, LifeLine Legacy Holdings LLC, which accused the company of “fraud”. Ozy’s lawyers secured a partial dismissal of the lawsuit in May, and LifeLine voluntarily dropped the remaining claims – without prejudice – in November.

The company says these two developments have the CEO of Ozy elated.

“In one case, for example, when a FOBL partner reported that the District Court in the LifeLine lawsuit had dismissed part of the investor lawsuit with prejudice, Carlos Watson responded in an email dated May 4, 2022: ‘BRAVO! Thanks. Excellent job. Very grateful,” the complaint reads. “And when FOBL counsel subsequently reported that the District Court was likely to grant Ozy Media’s second motion to dismiss LifeLine’s second amended complaint, Carlos Watson responded in an email dated Nov 3, 2022: ‘Thank you so much for your work and for the update.’”

Days later, LifeLine voluntarily dismissed their remaining claims with permission to re-file.

Ford O’Brien Landy wants the judge to award them $1,255,871.87 for services rendered, plus interest.

Ozy Media did not immediately respond to an email seeking comment.

Read the process here.

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