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Liberty Acts To Remove Diller

Liberty Media sued Monday to try and remove Barry Diller from the board of IAC/Interactive Corp and effectively seize control of the operator of, Ticketmaster and the HSN home shopping network.

The Wall Street Journal reported Monday evening that Liberty, which has the majority of votes in determining strategic moves by IAC, filed a court action to remove Diller and other directors of IAC. Liberty would put in place its own nominees.

Diller, in a statement, called the court action “hogwash” and said he thought Liberty’s top executives “are insane.”

Liberty’s chairman is cable television pioneer and former Tele-Communications Inc. chief executive John Malone. Liberty’s chief executive is Greg Maffei, a former Microsoft and Oracle executive.

Liberty, in its action, also is asking for the removal of six other IAC board members including Diller’s wife, designer Dianne Von Furstenberg, spirits magnate Edgar Bronfman Jr. and media banker Steven Rattner.

Liberty Media filed suit Jan. 24 to block a move by IAC/InterActiveCorp to split into five separate companies.

Liberty, which owns a 29.9% economic stake but 61.7% of the vote of IAC through Class B super-voting shares, apparently has been stewing for months after IAC chairman Barry Diller proposed the split in November.

According to the suit, Liberty wants to ensure that the dual-class voting structure currently in place at IAC will be retained after the split.

Liberty and Diller have an unusual relationship — Liberty gave Diller an irrevocable proxy to vote its stake in 2005. The suit comes two days after IAC sued in the same court to seek the right to complete the split on its own terms.

Liberty said the split — and Diller’s attempt to squash the dual-class structure of the company — was tantamount to a “corporate coup” of which the IAC chairman was the “chief architect,” according to the suit.

The rift comes after Liberty chairman John Malone praised the split on a conference call with analysts shortly after the proposal was made.