RBR-TVBR First
It’s been over 15 months since Alden Global Capital walked away from its deal to buy out the public shareholders of Emmis Communications in a partnership with Emmis CEO Jeff Smulyan (pictured). That lead to multiple lawsuits, but following the recent agreement by Emmis to buy back Alden’s preferred stock holdings for $16.3 million, RBR-TVBR has learned that all of the lawsuits are being wrapped-up as well.
Smulyan’s JS Acquisition had sued Alden over the deal breakup and got financial backing from Emmis to do so. That led to Alden suing the directors of Emmis, but that case was tossed by a New York judge who agreed with Emmis that the lawsuit over Indiana securities law belonged in Indiana, if anywhere.
But the number of lawsuits resulting from the dispute increased again recently when Emmis sued its former director, New York attorney Joe Siegelbaum (who’d been nominated to the board by the company’s preferred stockholders), charging that Siegelbaum had leaked confidential information to Alden.
The formal motions have not yet been filed, but RBR-TVBR has learned that the agreement to cash out Alden’s preferred stock was linked to a settlement of all litigation. That will include dismissal of both the JS Acquisition lawsuit against Alden and the Emmis lawsuit against Siegelbaum.
RBR-TVBR observation: Litigation is always messy and expensive. No doubt the management of Emmis would rather focus on operating the company, particularly now that the deal with Merlin Media for three FMs cleaned up the company’s balance sheet and Emmis subsequently got financial backing from a Sam Zell fund to buy back most of its preferred stock from Alden and others. Now, if Jeff Smulyan and company can just get the Emmis stock price back above a buck by the February deadline set by Nasdaq.
