The DIRECTV Group, Inc.
Ticker Symbol:
NYSE: DTV
Practice:
Securities Fraud & Shareholder Litigation
Phase:
Settled / Closed On May 4, 2009, Liberty Media Corporation (“Liberty Media”) and The DIRECTV Group, Inc. (“DTV”) announced their intention to merge certain affiliates of Liberty Media with DTV (the “Merger”). Liberty Media, DTV’s controlling stockholder, holds its interest in DTV through its “Entertainment Group” tracking stocks. John Malone, Liberty Media and DTV’s Chairman, holds approximately 17% of DTV’s common stock.
Under the terms of the merger agreement, Liberty Media will complete the previously announced spin-off of certain assets of its “Entertainment Group,” including DTV, into a new company, Liberty Entertainment, Inc. (“LEI”). LEI will have two tracking stocks, Class A and Class B. After the spin-off is complete, LEI will merge with DTV. The surviving company will be named “DIRECTV” and will have Class A and Class B common stock.
On May 18, 2009, Chimicles & Tikellis LLP filed a class action complaint on behalf of all minority holders of DTV Common Stock. The complaint asserted that as a controlling stockholder of DTV, Liberty Media was obligated to negotiate a merger that is entirely fair to DTV’s stockholders and engage in a process that is also entirely fair. The complaint further alleged that the DTV directors and Liberty Media violated their fiduciary duties owed to the DTV minority stockholders by imposing the Merger on terms that are not entirely fair and though a process that also was not fair and which confers special benefits to Liberty Media and John Malone (the owner of the Class B shares which have enhanced voting power) while imposing burdens on the DTV public stockholders. Chimicles & Tikellis LLP has been appointed by the Court to the Plaintiffs’ Executive Committee.
The case settled on very favorable terms for DTV’s public stockholders. As a result of the Settlement, the merger was amended to require majority approval by Class A stockholders in any subsequent merger in which Mr. Malone would stand to receive different consideration than other stockholders, to impose a three year standstill on Mr. Malone from acquiring additional stock in post-merger DIRECTV, and to enhance the independence of the DIRECTV’s Board of Directors.
On November 25, 2009, the Court of Chancery approved the Settlement. The Order and Final Judgment may be viewed by clicking the link below.
| Attachment | Size |
|---|---|
| New Orleans Employees' Retirement System Verified Class Action Complaint | 536.46 KB |
| Order and Final Judgment | 137.32 KB |
Attorneys to Contact:
Pamela S. Tikellis (PamelaTikellis@chimicles.com)
Robert J. Kriner, Jr. (RobertKriner@chimicles.com)
A. Zachary Naylor (ZacharyNaylor@chimicles.com)
P.O. Box 1035, 222 Delaware Ave, Suite 1100, Wilmington, DE 19801 Phone: 302-656-2500