WILMINGTON, Del. (CN) - Liberty Media is cheating shareholders by spinning off its Liberty Entertainment group to merge with DirecTV in a deal that will enrich Liberty Chairman John Malone, who also is a director of DirecTV, shareholders say in a Chancery Court class action.
The named plaintiffs - two pension funds - say the spun-off division will contain Liberty's majority stockholding in DirecTV, and that "far from being 'entirely fair' to DTV and its public shareholders, the proposed transaction provides a windfall to Liberty and its largest shareholder, John C. Malone, a DTV director and Liberty's chairman.
The $14 billion all-stock deal was proposed on May 3. Named plaintiffs - the Key West Police & Fire Pension Fund and The City of Roseville Employees' Retirement System - say the deal is intended to "wrest voting control over DTV from the company's public shareholders for inadequate consideration."
Plaintiffs' lead counsel is Stuart Grant with Grant & Eisenhofer.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.