Diller, Malone Settle Differences
Liberty Drops Appeal Of Delaware Court Decision
By Mike Farrell -- Multichannel News, 5/13/2008 11:26:00 AM
Liberty Media and IAC InteractiveCorp have buried the hatchet, with Liberty agreeing to drop its appeal of a Delaware Chancery Court decision and agreeing to support the split of IAC into five separate companies.
“Now it’s really over and that’s great for both of us,” IAC chairman Barry Diller said in a statement.
“I am pleased that we were able to amicably resolve our dispute with IAC,” Liberty chairman John Malone said in a statement. “Liberty supports the proposed restructuring of IAC and looks forward to the ongoing success of each of the new entities and IAC.”
According to the statement, both companies agreed on a number of arrangements regarding the governance of the spun off companies, including Liberty's right to board representation on each company and a standstill agreement that limits Liberty's ability to increase its ownership stakes and to take a variety of other actions with respect to the spun off companies.
IAC proposed to split itself into five separate companies—IAC, HSN, Lending Tree, Ticketmaster and Interval International—in November.
Initially, Liberty signed off on the deal, changing its mind only after it learned that IAC had planned to initiate a single-tier voting structure that would potentially slash Liberty’s voting control of the entities in half. Liberty owns a 29% equity stake in IAC but more that 62% of its vote.
As part of an earlier agreement, Liberty had agreed to let Diller vote its stake.
The dispute led to suits being fled in Delaware Chancery Court in January, with both sides claiming the other had violated their agreements.
The case came to trial in March with both sides hurling barbs.
Diller came out on top when Delaware Chancery Judge Stephen Lamb ruled in favor of IAC, stating that the single tier spin did not violate the agreement. Liberty filed documents with the court on May 9 that would have allowed it to further the appeals process.
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