Diller Triumphs in Malone Suit

NEW YORK, March 31: Barry
Diller has won a court case that allows him to proceed with the separation of
IAC/InterActiveCorp into five separate companies, a move that John Malone’s
Liberty Media had attempted to block.

The battle between
longtime business partners Malone and Diller headed into court earlier this
month, as Liberty Media fought to take control of IAC/InterActiveCorp. Malone
argued that the separation of the company would dilute Liberty’s voting
control. Although Liberty owns just 30 percent of IAC, it controls 62 percent
through a second class of super-voting shares.

Earlier this year, IAC
filed suit against Liberty, 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, seeking the
termination of the proxy granted to Diller and his removal from the board.

On Friday, Delaware
Chancery Court Judge Stephen Lamb ruled: “Liberty has failed to demonstrate
that Diller has breached or threatened to breach any contractual duty he owes
to Liberty. The proxy remains in effect.”

A statement from Diller
following the ruling noted: “I wish this hadn't happened, but it did. Now it’s
over and we can all get on with our work and lives.”

Following the separation,
HSN, Ticketmaster, Interval International and Lending Tree are all expected to
function as individual companies; the remaining IAC entity will include Ask.com
and Match.com.

—By Mansha Daswani