The embattled entertainment company that once dominated the television industry is now in a legal tussle with its lawyers and could face bankruptcy, according to people familiar with the situation.
The Los Angeles-based Dolan Entertainment Group, which owns such brands as Nickelodeon and The Simpsons, was rocked last year by accusations of copyright infringement by the Recording Industry Association of America.
The recording industry and the movie studios had already been battling over who owns the right to a certain song or a certain film.
But the dispute between the two sides, which included the studios, eventually led to a court-ordered settlement in which both sides agreed to stop using the songs and films in their music, movies and television shows.
Dolan has struggled to pay back the companies millions of dollars in licensing fees, which it is owed as well as damages.
The company has said it plans to file for Chapter 11 bankruptcy protection in the United States.
Discovery Communications, which owned the rights to The Simpsons in the 1990s, is also involved in the dispute.
Dillon Lutz, a spokesman for the company, declined to comment on the Dolan dispute or the potential bankruptcy filing.
Dolan declined to release a statement.
A Dolan spokeswoman, who asked not to be identified because the litigation is ongoing, said in a statement, “We are disappointed in the court’s decision and believe it is appropriate that we pursue our options in the best interests of our shareholders.”
Dolan’s chief financial officer, Gary R. Leibowitz, declined a request for comment.
The case has been going on for several months, the people said.
Risks to the company include losses in licensing revenue, and the possibility of bankruptcy, the sources said.
Dobbins & Stapleton, a law firm that represents both sides, has not responded to a request from The Associated Press.
Dobby, a major Hollywood studio, sued in January to stop the music video for the song “Lucky Girl” by the group the Replacements.
The lawsuit also included a suit against Dolan, alleging that it had infringed on the rights of a musician who signed on to produce a video for a Dolan music video.
The court in January agreed to settle with the singer, and in July it agreed to give the singer a portion of royalties.
The Dolan lawsuit is one of several legal battles that have shaken the entertainment industry in recent years.
In June, Sony Music sued Disney, saying it had breached a contract with Sony by releasing a song on Disney’s iTunes service that was covered by copyright.
That case is ongoing.
The music video “The Magic Kingdom” and a Dobbens music video, “Til Death,” are both in the works.
The Disney deal, which is subject to an appeal, could be signed by Dolan at any time, the source said.
A representative for Disney did not immediately respond to a call for comment on this story.
Dolby’s and Dolan have been at loggerheads for years.
In December, a Dolin-owned company filed suit against the studio alleging that Dolan had infringes on the company’s trademarks, including the term “Dolan.”
Doloras attorneys filed a countersuit, but the case has not yet gone to trial.
Dolin’s lawyers declined to answer questions about the litigation, saying they have a pending litigation.