KRU MEDIA, the producers of the local television sitcom Me and Mi Kru, has been slapped with a multi-million dollar lawsuit by CVM-TV for alleged breach of contract.

The television company is seeking to recover a total of $17.85 million, plus interest, money it said it pumped into the production of the programme and for its broadcasting on the station.

CVM is claiming, in documents filed in the Supreme Court, that it has been hurt financially by Kru Media’s “neglect or refusal to honour its obligations” under their agreements and said that it has been forced to access funds from commercial sources to fund its operations at a rate of interest of 10 per cent per annum.

According to court documents, Hemsley ‘Benzly Hype’ Morris Jnr, who also appears in the sitcom, and Richard Elgood, trading as Jallywood Studios, entered into a sponsorship and broadcasting agreement on September 4, 2008, for CVM to provide US$100,000 for the production of the programme.

It was agreed, according to the documents, that CVM would be entitled to 20 per cent share in the revenues from all sales of the entire first season (a total of 13 episodes) until its investment is recouped. In November 2008, Jallywood agreed to repay CVM US$120,000 no less than 45 days after the airing of season one’s last episode on May 25, 2009, the documents said.

The US$100,000 was paid by CVM to Jallywood Studios, in the form of cheques, between October 2008 and 2009. Another agreement was reportedly reached on January 15, 2010 for the defendant to pay J$40,000 plus GCT per episode for the airing of 14 episodes of the sitcom on the station.

The court documents said further that in May 2010 CVM and Kru Media signed a memorandum of understanding (MOU) in which Kru Media assumed from Jallywood Studios the rights and obligations contained in the September 4, 2008 agreement and assumed liability for the outstanding sum of US$100,000.

As a result of the said MOU, CVM provided Kru Media with an additional J$4 million with the understanding that the television company would “obtain equity in the production being 80 per cent of the profit derived on net sales derived outside of the jurisdiction…” Additionally, Kru Media agreed to report its revenue from sales of the programme to CVM until the investment is paid off.

CVM said it has received no payment even though the programme had been run over the period February 2, 2009 to April 27, 2009 and repeated between March 2, 2009 and May 1, 2009. The claimant is also contending that Kru Media has sold the programme for airing in South Africa, Barbados, the UK, the US and other stations in Jamaica but hasn’t disclosed any contracts for sale or licensing of the sitcom to CVM, in breach of the MOU.

CVM is seeking interest at a rate of 10 per cent per annum on the US investment from November 2008 and the same rate, from 2010 on the $4 million, plus the additional US$20,000 that Kru Media had agreed to pay.