As first reported by RBR-TVBR that Emmis CEO Jeff Smulyan would most likely be taking Alden Global Capital to court over failed deal is now fact. Last Monday, 09/13/10, in an exclusive interview with RBR-TVBR Smulyan revealed that Alden had begun raising “bizarre” issues during the buyout process. “I guess we should have known,” he said of the unexpected departure of his financial partner. By comparison, dealing with the dissident preferred shareholders group, which had been the first roadblock to completing the going private transactions, was straightforward, Smulyan said. (note listen to the full audio at RBR.com)
Yesterday, Wednesday 09/15/10, attorneys filed a breach of contract claim against three Alden Global Capital units. Papers filed in Marion Superior Court in short stating that after months of negotiations with preferred shareholders Alden changed their mind backing Emmis in going private. Of course this cost a lot of money in fees and various expenses.
Smulyan stated “We entered into an agreement with Alden, believing them to be fair and trustworthy individuals,” Smulyan said in a prepared statement. “What we experienced was far different. No one should suffer the same fate at Alden’s hands.”
Alden on the other hand sees it differently. RBR-TVBR again first reported Friday 09/10/10, ‘Alden denies it agreed to a revised Emmis deal.’ and positions are being set for the likely court battle ahead. While Emmis Communications claims that Alden Global Capital had agreed to fund re-negotiated terms for taking Emmis private, then backed out, Alden’s telling of the story casts it as little more than an observer.
The RBR-TVBR observation on 09/10/10 stated: Whether or not Alden agreed to the revised deal will obviously be a key point of contention if and when this dispute gets to court. Emmis officials have said repeatedly that Alden agreed to the re-negotiated deal with the Preferred Lockup Group, and then backed out. Alden’s story is that it was never part of the reworked deal. No doubt many billable hours will be logged by attorneys fighting over that issue.
RBR-TVBR observation: HiHo HiHo it’s off to court we go. This was a ‘No-brainer’ to see this court battle brewing. And it kinda sorta maybe reminds us of another court battle in a major transaction: anyone remember Clear Channel and their battle in going private?