Lehman suit claims Spanish Broadcasting violated preferred obligations

By Caroline Salls

Pittsburgh, March 4 - Lehman Brothers Holdings, Inc. filed a complaint against Spanish Broadcasting System, Inc. in the Delaware Court of Chancery alleging a violation of Spanish Broadcasting's preferred stock certificate of designations, according to a Spanish Broadcasting news release.

Spanish Broadcasting said Lehman claims to own 39% of Spanish Broadcasting's series B preferred stock.

In the lawsuit, Lehman alleges that Spanish Broadcasting has failed in its obligations regarding its required preferred stock dividend payments.

Spanish Broadcasting said it has been and continued to be in full compliance with all of its series B preferred stock certificate of designation obligations.

As a result, the company said Lehman's allegations are frivolous and wholly without merit. Spanish Broadcasting has retained Skadden, Arps, Slate, Meagher and Flom LLP to represent it in connection with the Lehman action.

In addition, the judge presiding over Lehman's bankruptcy proceedings denied Lehman's objection to a proof of claim through which Spanish Broadcasting claimed almost $50 million in damages in connection with a Lehman affiliate's willful failure to fund its commitment under a Spanish Broadcasting credit facility, according to the release.

Spanish Broadcasting said the claim objection was denied the day before Lehman filed its complaint.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company emerged from bankruptcy on March 6, 2012.

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