TiVo Community Forum

TiVo Community Forum Archive 2
Covering threads with a last post date between
July 1, 2004 and December 31, 2005.



Forum Jump
Thread Tools Search this Thread Display Modes
Old 12-22-2005, 05:23 PM   #1 (Print)
Registered User
Join Date: Jul 2005
Posts: 70
Rupert Has Legal Troubles

News Corp faces trial over poison pill plan


ELEANOR HALL: Rupert Murdoch's News Corporation will face trial next year over allegedly breaching a contract with its international shareholders.

Pension funds from the US, the UK, the Netherlands and Australia have succeeded in getting two of their five claims against the company heard in a Delaware court.

They allege the company broke a promise not to extend its poison-pill plan unless shareholders could approve it.

Karen Percy has been speaking to the President of the Australian Council of Superannuation Investors, Michael O'Sullivan, who represents the six Australian super funds in this case.

MICHAEL O'SULLIVAN: Well we're very pleased. There were strenuous efforts by News Corp to knock the action out, and they've failed. And the courts found, it's the Chief Justice of Delaware, sitting as what's called the Chancellor of the Court of Chancery, and he's found that we have a prima facie claim for breach of contract, and a prima facie claim for what's called promissory estoppel, which means that effectively they gave us an undertaking and the only remedy for us is for them to be forced to perform the undertaking.

KAREN PERCY: Remind us of the case and what happened and why you're taking this action.

MICHAEL O'SULLIVAN: Last year we negotiated a series of governance improvements with News Corp as a condition of recommending support for their move from Australia to become an American company based in Delaware and there were a number of things agreed. Some of them went into the constitution of the new company, some were an agreement between the Murdoch interests and the company, reflected in the constitution.

And this one was about poison pills, which is about shareholder rights plans, designed to prevent takeovers by a third party. So they're not good or bad in themselves. It depends on the circumstances.

But what we said about them is that they can have the effect of the premium for control of the company passing from the major shareholder to another major shareholder with everybody else missing out.

And so we didn't want poison pills introduced and then maintained so that the company becomes a fortress and shareholders get no chance of selling their shares or their interests to a potential takeover.

They introduced one in order to block Mr Malone from Liberty, you might recall, last November, that was fine, that was in accordance with the agreement. But then in August of this year, Mr Murdoch announced at his press conference, really, talking about profit projections, that they were going to renew it for two years.

That was in August. They had their general meeting in October and they didn't put that to the shareholders. And that was our concern, that they'd promised that they would, and they broke that promise.

KAREN PERCY: What precedent is there for this kind of case? There's certainly a perception that Delaware courts err on the side of businesses. What chance do you think you have of wining this case?

MICHAEL O'SULLIVAN: I honestly don't know. We have to go on the advice of the American lawyers who are handling the case for us. But the advice is that there's a prospect, a good prospect, of winning on either or both of those grounds.

KAREN PERCY: What's News Corporation's position on this? Have you been in liaison, have you been negotiating, talking to them about this issue?

MICHAEL O'SULLIVAN: Their position when we launched the action was that it was frivolous, vexatious, and baseless, which seems now to be a better description of their spin than our case.

Then the only contact we've had with them, which I think is publicly known, is that one of the independent directors, a Mr Thornton, came to Australia to talk to us, but he didn't come to talk, didn't come to negotiate a settlement with us. That wasn't his purpose and it certainly wasn't ours.

But we would at any time have agreed to a proposal that they did put the poison pill extension to shareholders. If they'd performed their agreement we would have been satisfied.

KAREN PERCY: Ultimately News Corporation was able to move over to the US in part because you got the concessions you wanted and you backed the plan. Do you have any regrets now?

MICHAEL O'SULLIVAN: No, it was never our main purpose to block them going to Delaware. The only thing that we tried to do was to get them to take some of the better provisions of Australian law with them in their constitution and they agreed to some of them, but not all of them.

That was a compromise, and then thus the only regret, if you like, or the only disappointment we have, is that they made an agreement about this matter and then broke it.

And we think it's very important when companies make agreements with their shareholders in a public way and write to every shareholder and tout that agreement as a reason for now voting in favour of the redomicile, because it wasn't just us, they wrote to every shareholder in the world and told them that they'd done this, then they should honour it.

ELEANOR HALL: Michael O'Sullivan, President of the Australian Superannuation Investors, was speaking there to Karen Percy.

patonenow is offline Report Bad Post Report Post
Forum Jump
Thread Tools

Go Back  TiVo Community Archive2 > Main TiVo Forums > DIRECTV Receiver with TiVo

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -5. The time now is 11:41 AM.

Powered by: vBulletin Version 3.0.6
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
(C)opyright - All Rights Reserved. No information may be posted elsewhere without written permission.
TiVoŽ is a registered trademark of TiVo Inc. This site is not affiliated with TiVo Inc.

Spider History Index