Liberty Media, IAC Resolve Dispute

ENGLEWOOD/NEW YORK, May
14: The legal battle between John Malone and Barry Diller over the fate of
InterActive Corp. (IAC) is over, with Liberty Media lifting its opposition to
the separation of IAC into five different companies.

Liberty, which owns 30
percent of IAC, had previously sought to block the IAC separation, with Malone
arguing that the move would dilute his voting control of the company. IAC filed
suit against Liberty Media, seeking a ruling that Diller’s proxy—based on
a 1995 agreement that allowed Diller to exercise Malone’s voting
power—gave him the right to vote for the spinoff. Liberty Media countersued, asking for the termination of the proxy and
Diller’s removal from the board.

In late March, Diller won
the court battle when a Delaware Chancery Court Judge ruled that the proxy was
indeed valid. Liberty Media subsequently appealed that decision.

With the agreement
announced late yesterday, Liberty Media is dropping its appeal and has said it
will not oppose the spin-offs of HSN, Interval International, Ticketmaster and
Lending Tree. The two companies also agreed to Liberty's right to board
representation on each company. The deal also puts limits on Liberty's ability
to increase its ownership stakes and to take a variety of other actions with
respect to the spun-off companies.

Diller stated, "Now
it's really over and that's great for both of us."

Malone added: "I am
pleased that we were able to amicably resolve our dispute with IAC. Liberty
supports the proposed restructuring of IAC and looks forward to the ongoing
success of each of the new entities and IAC."

—By Mansha Daswani