After driving Aereo into bankruptcy, the major broadcast networks have asked a judge to block any asset sale that would allow the shuttered streaming media company to reinvent itself as a cloud-based DVR service.
As first reported by GigaOm, which obtained filings to the federal bankruptcy court of Manhattan, broadcasters including ABC, CBS, Fox and NBC believe such an asset sale would impair their ability to collect copyright damages related to Aereo's service.
"Aereo's bankruptcy case and broadcasters' copyright litigation are substantially intertwined," the broadcasters wrote in Monday's brief. "Substantial copyright issues still need to be resolved before any court can decide whether Aereo should be allowed to sell assets that have only one apparent use--to infringe the broadcasters' copyrighted work."
In a ruling in June, the U.S. Supreme Court struck down Aereo's ability to take, without license, the broadcast signals from major networks and transmit them to service subscribers' IP devices. The court did not, however, decide on Aereo's ability to operate a cloud-based digital video recording service.
Aereo's $20.5 million in assets, broadcasters say, could be parlayed as a means for the company to re-emerge from bankruptcy with a new business model--a new company unencumbered by existing litigation. Broadcasters would have to litigate against it all over again.
"If Aereo elects to sell its assets, Aereo should not be allowed to use the automatic stay to evade resolution of the issue as to the lawfulness of time-delayed retransmissions," the plaintiffs wrote. "If allowed to do so, Aereo would, in effect, be using the automatic stay as a device to obtain option value from a prospective purchaser willing to gamble on whether time-delayed retransmissions are infringing."
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