Liberty Media’s CEO Greg Maffei used his turn in Delaware court yesterday to hit the “lagging” performance of IAC/InterActiveCorp and his unhappiness with Barry Diller’s management of the company.
In the second day of testimony, Maffei told the court, “I was not happy with IAC’s performance. I thought it was lagging.” Maffei added, “We were less happy with Mr. Diller’s stewardship of the company” as a result.
With most of the fireworks expected today when Diller may take the stand, yesterday’s testimony focused mostly on Liberty’s longtime outside counsel, Baker Botts lawyer Fred McGrath, who contended that Diller has tried, through a series of transactions, to distance himself from Malone’s oversight.
At issue in the case is whether IAC can proceed with plans to divide the company into five pieces, all of which would no longer carry a dual-class stock structure. Liberty, which owns 30 percent of IAC’s equity but nearly 62 percent of its voting stock, contends such a plan would dilute its control of IAC, whose assets include Ask.com, Ticketmaster and HSN home-shopping network.
McGrath testified, for instance, about IAC’s spin-off of Expedia and how a special committee formed at the time had considered the same elimination of the dual-class voting structure that is in dispute now.
“I told them we didn’t think that was permitted and that Liberty would take a very hard position if that’s what the special committee tried to do,” McGrath said.
McGrath went on to say that Diller eventually agreed that spinning off Expedia with a single-tier voting structure “wouldn’t be fair and in the spirit” of the way transactions were done up until that point.
IAC’s lawyers did score on cross-examination, though.
When asked if it was clear that Liberty had blocking rights over a sale of IAC, McGrath conceded that it wasn’t.
“If it’s not clear, then how is IAC supposed to know?” Diller’s lawyer shot back. – With Post wire services