The gloves are coming off in the battle over the future of IAC/InterActiveCorp (Nasdaq:IACI), as the latest move by John Malone and Liberty Media Corp. (Nasdaq:LCAPA) is to try to get Barry Diller kicked off the board.
Each side has a lawsuit against the other, as they fight over the decision on whether to break IAC into five different and separate publicly traded companies.
Liberty Media owns close to 30 percent of the equity in IAC, but because it owns all the Class B common stock, which comes with 10 votes for each share owned, it is entitled to 62 percent of the voting power in the company.
Under the breakup, the shares would all convert to each share having the same voting power, essentially diluting the 62 percent now in Liberty's power, down to 30 percent after the breakup.
After Liberty CEO John Malone challenged the spin-off plan, IAC then filed a complaint in Delaware Chancery Court that the new voting structure be allowed to go on based on IAC's certificate of incorporation and bylaws.
The next day, Liberty filed a lawsuit saying Diller is in breach of the stockholders agreement which gave him proxy to vote Liberty's stock. Lawyers for Liberty also claim the proxy rights have expired.
The action to remove Diller didn't only focus on him, but included his wife Dianne Von Furstenberg, along with five other board members.
Comment Preview