Liberty Media's John Malone and his former colleagues on Charter Communications Inc.’s board have settled claims the billionaire unfairly benefited from the $79 billion purchase of Time Warner Cable that he helped finance, according to a securities filing, reports Bloomberg.
Charter told the US Securities and Exchange Commission last week that it had reached a “tentative agreement,” pending court approval, that will result in a net payment to Charter to resolve a shareholder lawsuit against directors of the cable company over their handling of the 2016 deal.
A trial was set to start in Delaware Chancery Court on Feb. 6 but has now been taken off the docket, court officials said.
Money Goes to Company
Charter shareholder Matthew Sciabacucci accused the cable provider’s directors of allowing Malone, then on the board, to reap unfair tax benefits from stock he got in the merger through a side deal. Malone has been called the “cable cowboy” because of his extensive holdings in the industry.
In such derivative lawsuits, as they’re called, shareholders sue company directors, and any money awarded in a trial or settlement goes back to the company rather than to the investors who filed the suit. It is often paid by insurance covering board members.
Malone’s Liberty Broadband owned 26% of Charter, making it the cable company’s largest shareholder at the time of the acquisition of Time Warner Cable. Besides Malone, Liberty had the right to appoint three more directors to Charter’s board.
The acquisition was financed partly with $4.3 billion from Liberty, while a related $10 billion deal for Bright House Networks LLC was paid for partly with another $700 million from Liberty.
No comments:
Post a Comment