Paul Singer-Backed Suit to Help Companion’s Son, Quibi Says

(Bloomberg) -- Paul Singer is helping to finance a patent lawsuit against Quibi because of his romantic relationship with the mother of a senior executive at the plaintiff company, the defunct streaming service claims in a court filing.

Quibi said in a Thursday filing in federal court in Los Angeles that Singer, co-chief executive officer of Elliott Management, is romantically involved with Terry Kassel, head of strategic human resources for the fund group. Her son, Stephen Backer, is in turn director of creative development at Eko, a New York-based entertainment technology company that last year sued Quibi alleging theft of trade secrets and patent infringement.

Eko, which said in a Jan. 11 court filing in the patent suit that Elliott was providing funding in the lawsuit, claims it showed proprietary technology to Jeffrey Katzenberg, the former Walt Disney studio head and DreamWorks co-founder who started Quibi with former eBay chief executive officer Meg Whitman, as early as 2017. According to Eko, Quibi ripped off this technology for its app’s signature “TurnStyle” viewer.

Singer, 76, and Kassel, 70, have been in a committed relationship for about a decade, a fact which is well-known within Elliott, according to a person familiar with the matter.

“The irrelevance of Quibi’s focus on personal matters in order to put forward a false narrative about Elliott’s role related to this case demonstrates Quibi’s reluctance to engage forthrightly on the actual underlying legal issues,” Richard Zabel, Elliott’s general counsel, said in a statement. “Elliott decided to finance this litigation because we strongly believe that Eko will prevail in its claim that Quibi stole its valuable intellectual property.”

‘Reasonable Royalty’

Quibi, which created movies and shows designed to be streamed on mobile devices and viewed in minutes-long increments, proved one of the biggest tech flops in recent memory and shut down soon after its April launch. But Eko, a unit of closely held JBF Interlude 2009 Ltd., is nonetheless seeking $101.9 million in damages as a “reasonable royalty.”

Quibi sold rights to its content to Roku Inc., which Quibi in a Feb. 1 court filing called its “ultimate parent company.”

A federal judge last July denied Quibi’s request to dismiss the patent suit.

In Thursday’s filing, which was first reported by the Wall Street Journal, Quibi asked the court to order Elliott, Singer and Kassel to sit for depositions within 10 days and hand over documents related to Elliott’s investment in Eko. “Discovery will reveal whether Elliott’s stated confidence in Eko’s claims is based on evidence or based on fabrication and a personal favor,” the filing says.

Quibi also wants the court to force Elliott to provide its communications with media outlets about Quibi, Eko or the litigation, and correspondence with third parties “reflecting Elliott’s efforts to achieve search optimization to promote stories about the litigation ahead of search results for Quibi’s streaming service.”

The patent-infringement complaint was amended Jan. 28 for a fifth time and now includes as defendants Quibi’s founder and employees, unusual in such cases.

The case is JBF Interlude 2009 Ltd. – Israel v. Quibi Holdings LLC, 2:21-mc-16, U.S. District Court, Central District of California, Western Division (Los Angeles).

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