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Thursday, June 20, 2024 | Back issues
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Howard Stern Loses Bonus Denial Appeal

(CN) - A New York appeals court tossed radio shock jock Howard Stern's bid for more than $300 million in stock bonuses related to the Sirius and XM Satellite Radio merger.

Stern, his production company One Twelve Inc., and his agent, Don Buchwald, had claimed that they were entitled to bonuses based on the addition of subscribers through the 2008 merger between Sirius and XM Radio.

The shock jock moved to Sirius in 2004 in protest over Federal Communications Commission actions against his show in the traditional format.

Stern's team collected $82.5 million in common stock in January 2007 because Sirius met subscriber targets for 2006, with an additional 2 million subscribers above its internal estimates. But Sirius did not exceed its estimate by 4 million subscribers in 2007, so it did not pay common shares that year.

Buchwald and One Twelve argued that they are entitled to factor XM's original subscribers into bonus calculations, which would generate an additional $300 million to One Twelve and $30 million to Buchwald.

Sirius XM argued that XM remained a separate, wholly owned subsidiary of Sirius under the merger, and that subscriptions to either service are not "one and the same."

After a New York County Supreme Court judge dismissed the suit with prejudice in April 2012, a five-judge panel of the Appellate Division affirmed Thursday.

"Looking solely to the plain language used by the parties within the four corners of the agreement, the disputed term 'Sirius subscribers,' by which plaintiff's performance-based compensation was measured, did not include subscribers to XM Radio, a wholly owned subsidiary which defendant acquired by merger, even though the merger had been anticipated within the agreement," the brief unsigned decision states.

Stern blasted the decision at the beginning of his SiriusXM program Monday morning, claiming it robbed him of the one thing he wanted - "My day in court."

The appellate decision noted that the motion court got it right in finding "that plaintiffs are not entitled to additional performance-based compensation under the unambiguous agreement between plaintiffs and defendant's predecessor, Sirius Satellite Radio Inc."

The attorneys for Sirius XM at Kramer Levin Kramer Naftalis & Frankel applauded the ruling.

"By dismissing the complaint with prejudice, the court made clear that Sirius XM had fully performed its obligations to One Twelve and Stern," the firm said in a statement.

Gary Naftalis had headed the defense.

Stern was represented by Seth D. Rothman of Hughes, Hubbard & Reed.

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