Barry Diller wins battle for IAC/InterActiveCorp
Court ruling Friday paves the way for a plan to split Internet media giant IAC/InterActiveCorp into five companies.
(Fortune) -- A Delaware judge on Friday sided with media mogul Barry Diller in his dispute with John Malone, effectively paving the way for the breakup of Internet media giant IAC/InterActiveCorp.
The decision is the latest chapter in a high-profile showdown between billionaires Diller and Malone, who has a controlling interest in IAC/InterActive. Under a 1995 proxy agreement between Diller and Malone, Malone gave Diller the right to exercise Malone's 60% voting authority.
The media moguls are battling over Diller's proposal to break up IAC (IACI, Fortune 500) into five separate companies. IAC's holdings include Ask.com, Match.com, Ticketmaster, and the Home Shopping Network. The proposal would diminish Malone's majority shareholder voting power in the spinoffs. Malone agreed that the spinoff would be a good idea, but objected to the shareholder voting structure of the spinoffs.
Delaware Chancery Court Judge Stephen Lamb on Friday upheld that proxy agreement, letting Diller vote Malone's shares in favor of the breakup
Malone contends that Diller is attempting to wrest control of IAC from Liberty Media (LINTA), which owns a majority of the company's voting stock.
Malone and Liberty had asked the court whether it could oust Diller on the claim that he breached his fuduciary duties to shareholders by devising the spinoff plan.
On that matter, Lamb concluded that "it is premature to consider the claimsrelating to the fiduciary duties of the IAC board of directors.
"The simple, inescapable fact is that the IAC directors have not yet finally authorized the spin-off," he wrote, "and have not even considered many of the essential terms of that transaction, including the voting structure of the spincos."
The ruling caps a five-day trial held earlier this month.