The lawyers are having a field day with what is now a fight over control of IAC/InterActive Corporation. John Malone’s Liberty Media has sued to toss out most of the directors of IAC and revoke IAC CEO Barry Diller’s right to vote Liberty’s IAC stock. In response, a statement from Diller and IAC call Malon’s action “preposterous” and say Liberty “has gone off the deep end.”
Miller is fit to be tied that Diller is proposing to spin-off four new companies from IAC with each having a single class of voting stock, thus eliminating Liberty Media’s theoretical voting control (1/28/08 RBR #18). We say theoretical because Diller holds the proxy to vote those super-voting shares owned by Liberty.
Now Liberty has filed a court action which, if successful, would strip Diller of that proxy and even his seat on the IAC board. Liberty’s lawsuit also seeks to unseat Diller’s wife, Diane Von Furstenberg, and five other IAC directors: Edgar Bronfman Jr., Victor Kaufman, Arthur Martinez, Steven Rattner and Alan Spoon.
According to IAC and Diller, the previous round of lawsuits over whether or not IAC has the right to establish a single class of voting stock for the spin-offs was a “well intentiond effort at peaceful resolution,” but that now “Liberty has now gone off the deep end, not only alleging that Mr. Diller has somehow materially breached his proxy by which he has voted Liberty’s IAC shares for over 12 years, but also purporting to unilaterally throw out the incumbent directors and installing its own slate.”