Barry Diller Victorious In Liberty's Attempt To Block IAC SpinoffMon Mar 31, 2008 @ 10:10AM PST
Posted by Eriq Gardner
A Delaware Chancery Court has handed Barry Diller a huge victory in a lawsuit with Liberty over whether he can go forward with a plan to split IAC/InterActiveCorp into five companies.
In a statement after the ruling, Liberty stressed it was merely concerned with the precedent of allowing single-tier voting structures to guide spin-offs. The company, whose stock is counter-intuitively up after the decision, said it "never suggested that Liberty was otherwise opposed to the spin-offs."
Translation: We just didn't want Diller running the show.
Liberty also says it will keep its mind open to an appeal. John Malone and his Liberty lawyers are reportedly engaged in conversations today about what to do next.
The judge's 79-page memorandum opinion does leave the door open for further legal action, especially since Diller testified that a final determination over the spin-off had not been made. The court wrote:
"It is premature to consider the claims relating to the fiduciary duties of the IAC board of directors... Liberty’s challenge to the ultimate decision of the IAC board to authorize the spin-off will, of course, depend on the decisions actually made and the record of the directors’ deliberations. Because there is no ripe dispute, the court declines to make any advisory rulings on this subject. Rather, the court will retain jurisdiction over these claims for later resolution on a more complete record, if the need arises.”
It sounds like the court really couldn't care less about the feud between former friends Malone and Diller. It delivered a long-but-narrow ruling that focused on the legal minutia over voting rights. There's plenty of legal room for this dispute to grow, though judging by early shareholder reaction that seems to indicate this mess has been a distraction for the business at hand, pressure to resolve the matter once and for all might be Diller's biggest victory.