Ozy Media Owes Its Law Firm $1.3 Million: New York Lawsuit

Johnnie Pratt
Carlos Watson Today Show

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

Ozy Media has been sued above a nearly $1.3 million lawful monthly bill its legislation organization statements to have racked up dealing with the fallout of a bombshell New York Situations exposé about the organization.

Co-started by CEO Carlos Watson and chief operating officer Samir Rao in 2013, Ozy Media can take its identify from poet Percy Bysshe Shelley’s Ozymandias, a sonnet about the fleeting character of power and the powerful. Taking inspiration from that verse, Ozy started off with ambitions of turning into 1 of the few media organizations established and operate by people today of color — and it swiftly discovered large-profile backers, reportedly boosted by a seed round of funding from Laurene Powell Work. German media huge Axel Springer poured $20 million into the business the next yr, and other main investors followed, which includes billionaire Marc Lasry and the Ford Foundation.

The company’s fortunes turned in October of 2021, when then-Occasions media columnist Ben Smith reported on a “strange” Zoom get in touch with Ozy Media held with yet another prospective investor: Goldman Sachs. In accordance to the article, COO Rao evidently impersonated the voice of YouTube Originals government Alex Piper on the connect with. 4 folks briefed on the meeting anonymously advised the Moments that the voice appeared to have been “digitally altered.” CEO Watson reportedly blamed Rao’s mental health and fitness disaster for the incident.

The article also depicted the upstart digital media company’s reports of substantial traffic as suspect, either “hype” or worse.

Soon after the post, Ozy Media briefly shut down and reopened, in what Watson described on the These days Show as the company’s “Lazarus moment.” The business also had to contend with litigation and numerous federal investigations, which the lawsuit notes had been both equally prison and civil.

On Dec. 22, 2022, its legislation organization Ford O’Brien Landy LLP (FOBL) filed a criticism in New York County Supreme Court docket claiming Ozy Media’s legal expenditures have been mounting through the yr with no finish in sight.

“When FOBL has raised Ozy Media’s arrears with Mr. Watson or enterprise associates in phone phone calls or video clip-conferences, Mr. Watson and/or these reps have consistently urged the agency to be client until the company’s economic picture enhanced, at which issue, they promised, the corporation would get started to perform down and in the end extinguish the big remarkable balances,” the 16-webpage complaint states. “But instead, Ozy Media’s personal debt to FOBL, much from staying lowered, has mounted steadily each thirty day period in 2022 right up until the present.”

According to the lawsuit, the organization represented Ozy Media in the Japanese District of New York’s prison investigation, the Securities and Trade Commission’s civil probe, and a pair of lawsuits in the Northern District of California.

Furnishing couple particulars about people investigations, the lawsuit discloses that they concerned mountains of paperwork.

“The agency had a number of obligations, such as approach, communications with the authorities, interviews, and the assessment and generation of additional than 27,000 documents, consisting of over 160,000 web pages, in response to various governing administration files subpoenas,” in accordance to the grievance.

Ford O’Brien Landy LLP notes they experienced success fending off a lawsuit by 1 of Ozy Media’s buyers, LifeLine Legacy Holdings LLC, which accused the business of “fraud.” Ozy’s lawyers secured the lawsuit’s partial dismissal in May well, and LifeLine voluntarily withdrew the remaining statements — without prejudice — in November.

The company states that both these developments remaining Ozy’s CEO exultant.

“In just one instance, for example, when a spouse at FOBL documented that the District Court in the LifeLine lawsuit experienced dismissed a portion of the investor’s lawsuit with prejudice, Carlos Watson responded in an email dated May well 4, 2022: ‘BRAVO! Thank you. Superb work. Quite grateful,”” the grievance states. “And when FOBL counsel noted at a afterwards level that it was probable that the District Court docket would grant Ozy Media’s second motion to dismiss LifeLine’s 2nd amended complaint, Carlos Watson responded in an e-mail dated November 3, 2022: ‘thank you so significantly for the perform and the update.’”

Days later on, LifeLine voluntarily dismissed its remaining promises with depart to refile.

Ford O’Brien Landy needs the decide to award them $1,255,871.87 for solutions rendered, plus curiosity.

Ozy Media did not instantly react to an e mail requesting remark.

Study the lawsuit listed here.

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