Glenn Beck seems to be an endless source of nutty stories.
Maybe the multimedia oddball spent too much time being spun around while strapped in a giant gyroscope that, as he told his fans, helped cure him of a mysterious brain illness that “quite honestly has made me look crazy.”
Or maybe—according to his detractors, anyway—he’s just getting strange legal advice.
Whatever the reason, a multimillion-dollar fraud, breach of contract, and dereliction of duty lawsuit that Beck’s company, Mercury Radio Arts, filed three weeks ago against Christopher Balfe—MRA’s former chief operating officer and the ex-CEO of its subsidiary The Blaze—could end up biting Beck in the behind.
According to Balfe’s certified letter that was hand-delivered on Thursday to The Blaze’s nearly empty Manhattan offices (with a copy sent to New York’s secretary of state), Beck is not only required to indemnify his former executive against his own lawsuit—which was filed July 29 in Dallas District Court—but he must also pay in advance for Balfe’s rapidly mounting legal fees.
This, the letter argues, is because Balfe, as a director and officer of The Blaze at the time he committed the acts alleged in MRA’s complaint, is protected from all litigation relating to his official duties under the laws of the state of Delaware, where The Blaze was incorporated.
“Delaware law does this because nobody would ever agree to serve as a director or officer of a company if they were personally liable for the decisions they make in that capacity,” said a source close to Team Balfe. “So the company has to act as a shield or nobody would ever do it.”
The Daily Beast attempted to verify this interpretation of state law with the Delaware attorney general’s office, but didn’t receive an answer by deadline.
Meanwhile, the corporate bylaws of The Blaze, Balfe’s letter contends, require Beck’s company to pre-pay his attorneys’ fees, which could run into the hundreds of thousands of dollars if Beck’s lawsuit goes forward.
And because of the provisions of Delaware law, says the Team Balfe source, Beck would end up having to pay damages to himself were he to prevail in a jury trial.
Team Beck might be expected to vehemently disagree with the assertions in Balfe’s letter, a copy of which was obtained by The Daily Beast, but Eric Ostroff, an attorney for Beck and MRA, declined to comment.
Balfe, who launched a digital media company, Red Seat Ventures, with several other former Beck execs after he was fired from The Blaze in December 2014, also declined to comment. But if Beck and MRA President Jonathan Schreiber ignore his letter, Balfe can be expected to file his own lawsuit in order to enforce its claims.
Even more weirdly, in what is already a topsy-turvy circumstance, Balfe continues to hold a slightly more than 10 percent stake in The Blaze, more than 70 percent of which is owned, in turn, by Beck’s umbrella company, MRA. Beck owns 100 percent of that company.
According to sources with knowledge of the situation, Balfe was owed $1.6 million in deferred income when Beck asked for his resignation.
After they parted ways, with Beck publicly praising him for “help[ing] me build one of the industry’s first truly independent multi-media companies,” Balfe was paid $40,000 per month for 18 months—that is, until The Blaze, which was having financial difficulties, losing viewers, and being dropped by its cable television distributor, missed a payment in May.
That was when Balfe sent a letter to MRA indicating he would explore his legal options if payments were not forthcoming.
Shortly afterward, with more than half of Balfe’s deferred compensation still due, MRA filed suit against him.
“Maybe they thought they could spend $40,000 a month on their lawyers for a few months and get out of paying him,” said the Team Balfe source.