John Malone and Former Charter Board Colleagues Pay $87.5 Million to Settle Suit Related to the TWC Purchase
The 6-year-old suit accused the defendants of unfairly benefitting from Charter's $78.7 billion purchase of Time Warner Cable back in 2015
TMT tycoon John Malone and several former colleagues on the Charter Communications board of directors have agreed to pay $87.5 million to settle a 6-year-old investor lawsuit tied to the $78.7 billion purchase of Time Warner Cable by Charter in 2015.
Investor Matthew Sciabacucchi sued Malone, along with Gregory Maffei and former Charter CEO and Chairman Tom Rutledge, among several others, claiming they “received unfair tax benefits” through a “side deal” carved out amid the merger.
At the time of the TWC purchase, Malone’s Liberty Media was Charter’s largest shareholder, controlling 26% of stock. The suit said Malone and the rest of the defendants received an all-stock consideration in shares Liberty held in TWC, while other investors received a mix of stock and cash.
The suit was filed back in February 2017 in Delaware. (You can read it here (opens in new tab).)
Bloomberg (opens in new tab) was the first to report on the settlement.
For their part, the defendants don't admit wrongdoing and claim they settled the complaint to “avoid the burden, expense, disruption, and distraction of further litigation.”
The settlement money will actually go to Charter, which the suit alleges was unfairly compensated. ■
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!