Sirius XM Radio Inc. investors can’t proceed with a lawsuit
claiming company directors let billionaire John Malone’s Liberty Media Corp.
take control of the satellite-radio provider without paying a premium or
holding a shareholder vote on the deal, a judge ruled.
According to Bloomberg , Delaware Chancery Court Judge Leo Strine rejected
allegations by lawyers for the City of Miami
Police Relief and Pension Fund that Sirius’s board
improperly allowed Liberty Media officials to engineer a takeover of the
broadcaster in 2009 in exchange for a $530 million loan to keep then-struggling
company out of bankruptcy. Investors waited too long to challenge the directors
decision to enter the loan agreement that gave Malone a chance to buy the
company, the judge added.
Sirius shareholders aren’t entitled to “sit on the sidelines
benefitting from the investment Liberty Media made in Sirius until after the
statute of limitations expires and then belatedly seek to deprive Liberty Media
of the benefits of the contract it received in exchange,” Strine said in
throwing out the suit.
Liberty Media gained majority control of Sirius in January
after buying 50 million shares of the radio operator and getting regulatory
approval for the deal.
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