The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Satellite Bahamas and its principals, the Garraway brothers, yesterday disclosed they had reached “a tentative settlement agreement” with DIRECTV over the latter’s multi-million dollar lawsuit against them.

The Mackey Street-based satellite TV provider, and its owners, disclosed in US court filings that the two parties had agreed to suspend their legal battle until March 21, 2014, to give themselves and DIRECTV time to work out the details.

In a joint filing with the south Florida district court yesterday, DIRECTV and Satellite Bahamas, in announcing their ‘standstill agreement’, said: “The parties are pleased to notify the court that a tentative settlement agreement has been reached in principal that would resolve all claims between the parties and terminate this litigation.

“However, some of the specifics still need to be worked out before a full and formal settlement can be agreed to, finalised and signed by the parties.”

The joint filing did not disclose any potential details of their agreement, but added: “In light of the parties’ desire to dedicate their resources toward resolving this matter and to conserve judicial resources, with the court’s indulgence, the parties have agreed to discontinue any and all litigation activities in this proceeding, including all motion practice, discovery, and responses to existing discovery through and including March 21, 2014.”

Should negotiations over a satisfactory out-of-court settlement fall through, the court filing adds: “In the event that the tentative settlement fails to materialise into a final binding settlement agreement before March 21, 2014, the parties will promptly notify the court and the litigation will resume.”

The prospect of avoiding protracted, and expensive, litigation in the Florida courts will likely be a major relief to the Garraways and their spouses, whom DIRECTV had added as defendants in its latest amended complaint against them.

The largest US satellite broadcaster had previously alleged that the Garraways, and Satellite Bahamas, earned at least $8.8 million in revenues from the illegal pirating of its programming signals, which are not supposed to be broadcast outside the US.

Also breathing a sigh of relief, perhaps prematurely, will be the 10 Bahamian businesses named by DIRECTV as so-called ‘John Doe’ defendants because it has yet to uncover their names. Such businesses included casinos, hotels and restaurants.

““Upon information and belief, the Bahamas Does own and/or operate commercial establishments in the Bahamas, including, by way of example, casinos, hotels, restaurants, bars and other commercial establishments, that receive and display DIRECTV programming, without authorisation from DIRECTV,” the US satellite broadcaster had alleged.

Tribune Business revealed earlier this month how DIRECTV was claiming Satellite Bahamas used more than three times’ the number of accounts initially thought to pirate its signal, with the alleged scheme far more extensive that initially thought.

Its amended lawsuit acknowledged that initial investigations had revealed Satellite Bahamas owned 621 subscriber accounts. These were used to activate 5,803 satellite receivers, which were “exported and sold in the Bahamas”.

DIRECTV, though, then alleged that the claimed scheme, based on information received from Satellite Bahamas - presumably through discovery - was much broader than even it first realised.

“Subsequent to the filing of this action, defendant Satellite Bahamas admitted that between 2001 and 2013, it used 2,043 subscription accounts to provide DIRECTV satellite television programming to its customers,” the US satellite programmer’s latest lawsuit version alleged.

“Upon information and belief, each account was created by defendants using false subscriber names, false service addresses and other false information.

“DIRECTV is continuing to analyse the accounts identified by Satellite Bahamas, and the losses associated with those accounts, but has tentatively determined that 1,032 accounts were used to activate at least 9,099 receivers which, upon information and belief, defendants exported and sold in the Bahamas.”

DIRECTV then alleged that after cutting off Satellite Bahamas’ subscription accounts in January 2013, and informing Michael Garraway about this, the company continued to establish new accounts.

It added that the new accounts were used to activate another 1,405 satellite receivers, and that Satellite Bahamas continued to make payments on these accounts.

The Garraways, meanwhile, had argued that DIRECTV’s action against them should be dismissed on jurisdictional grounds because they - and Satellite Bahamas - are domiciled in this nation, not the US.

They are arguing that the legislation cited by DIRECTV does not apply to communications activities that took place inside the Bahamas, and that Satellite Bahamas’ website was only a marketing tool to customers within this nation.