Wednesday, October 11, 2006

Extra, Extra, Read All About It!

According to news reports (AP via Yahoo! Finance) the recently filed shareholder derivative action against eight Tribune Company (NYSE: TRB) directors was volunatrily dismissed after the judge overseeing the litigation questioned whether he had subject matter jurisdiction to hear the case.

The litigation alleged that the board had refused to consider offers to buy the company's biggest paper, The Los Angeles Times, and that Tribune's $2.4 billion stock buyback in June depleted cash and made the company unattractive to potential buyers.

The result according to the complaint:
Defendants have held and are holding the company and its shareholders hostage.
The class action sought a ruling that the directors had breached their fiduciary duty to the company, along with an order compelling the board to name an independent committee to consider purchase offers and other strategies.

The suit was filed on September 19 in the United States District Court for the Northern District of Illinois and had been assigned to Senior Judge Milton Shadur.

Articles about the filing of the complaint can be found here (AP via Yahoo! Finance) and here (Bloomberg via The Boston Globe).

In two orders issued Sept. 21 and Sept 25, Judge Shadur questioned whether he had jurisdiction over the matter and suggested that the case should instead be filed in state court.

No word on whether the complaint has been refiled, but the likely destination would be the Circuit Court of Cook County.

Lasky & Rifkind, Ltd. and Lerach Coughlin Stoia Geller Rudman & Robbins LLP were counsel in the Tribune litigation.

Daily Trivia: Among other media properties, the Tribune Company owns WPHL-TV, a television station in Philadelphia currently affiliated with the MyNetworkTV television network. WPCA-TV, the predecessor to WPHL on Channel 17, was Philadelphia's first commercial UHF channel.

No comments: