Preferred shareholders file suit against ION Media to stop exchange offer

By Lisa Kerner

Charlotte, N.C., June 15 - ION Media Networks, Inc. said a group holding shares of the company's 13.25% cumulative junior exchangeable preferred stock filed suit in Delaware against ION Media, seven of its directors, NBC Universal, Inc., Citadel Investment Group LLC and Citadel's affiliate CIG Media LLC.

The plaintiffs are seeking an injunctive and other relief relating to ION Media's June 8 offer to exchange the preferreds and its 9.75% series A convertible preferred stock for newly issued 11% series A mandatorily convertible senior subordinated notes due 2013 and, depending on participation levels in the exchange, either new 12% series A-1 mandatorily convertible preferred stock or 12% series B mandatorily convertible preferred stock.

ION, a West Palm Beach, Fla., network television broadcast company, believes the lawsuit is without merit.

The exchange offer expires on July 10, according to a company news release.

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