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Shareholder Class Action - Corporate Transactions
IAC/Interactivecorp (NasdaqGS: IACI)
Complaints:
On February 8, 2008, Chimicles & Tikellis LLP filed a class action lawsuit in the Court of Chancery of Delaware against IAC/Interactivecorp ("IAC"), its Board of Directors and its controlling shareholder, Liberty Media Corporation ("Liberty"). IAC is a Delaware Corporation which operates as an interactive global commerce company. IAC's common stock is organized in a two-tiered voting structure, whereby shares of IAC's common stock are entitled to one vote per share and shares of IAC's Class B common stock are entitled to 10 votes per share. Liberty beneficially owns 100 percent of the high-vote Class B common stock and approximately 22.8 percent of the low-vote common stock. This entitles Liberty, although it only owns roughly 30 percent of the Company's equity, to control 61.7 percent of the voting power of IAC's outstanding stock. The Class Action Complaint was filed by a holder of the low-vote common stock on behalf of all public holders of the low-vote common stock.
In November 2007, the IAC Board, including Liberty's two appointees, John C. Malone ("Malone") and William H. Berkman, unanimously approved a decision to separate IAC into five publicly traded companies (four of which would be newly formed corporations through spin-offs). In order to enhance the value of the spun-off entities, IAC's management proposed an equity structure that would create only a single class of stock in the four new companies. Liberty is now trying to prevent the consummation of the spin-offs if it does not receive the same low-vote/high-vote structure in the newly spun-off entities as it currently possess in IAC.
The Class Action Complaint seeks a declaration that IAC's Restated Certificate of Incorporation requires the common stockholders and Class B common stockholders be treated equally and identically and thus the newly created entities should be structured in a manner so that only one class of stock exists. The Class Action Complaint also seeks a declaration that, were the Board and Liberty to permit the Spin-Off Transaction as proposed by Malone and Liberty, such transaction would unfairly accord preferential treatment to Liberty, in breach of the Board's fiduciary duties.
If you wish to discuss this Action further, have any questions concerning your rights or interests, would like to obtain a copy of C&T's Client Advisory on this matter, or need additional information on this Action please contact:
Pamela S. Tikellis - E-Mail: pst@chimicles.com
Scott M. Tucker -- E-Mail: smt@chimicles.com
CHIMICLES & TIKELLIS LLP
One Rodney Square
P.O. Box 1035
Wilmington, Delaware 19899
(302) 656-2500
(302) 656-9053 (fax)
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