Lehman Spanish Broadcasting certificates violation lawsuit dismissed

By Caroline Salls

Pittsburgh, Dec. 18 – Lehman Brothers Holdings Inc.’s lawsuit alleging that Spanish Broadcasting System, Inc. violated preferred stock certificates of designation by incurring debt without paying quarterly dividends has been dismissed, according to a Spanish Broadcasting news release.

Lehman filed the lawsuit against Spanish Broadcasting on Feb. 14, 2013 in the Delaware Court of Chancery.

According to the release, the lawsuit sought a ruling that a voting rights triggering event had occurred under the certificate of designations for the series B preferred stock as a result of the non-payment of dividends.

Specifically, Lehman alleged that Spanish Broadcasting was prohibited from incurring debt, but nonetheless did so for the purposes of purchasing assets related to its Houston television station and the issuance of its 12½% senior secured notes due 2017.

On Feb. 25, 2014, Spanish Broadcasting’s motions for summary judgment and judgment on the pleadings was granted, and Lehman’s motion for summary judgment was denied. Lehman appealed the denial.

On Dec. 11, the Supreme Court of Delaware affirmed the Chancery Court’s dismissal of Lehman’s claims.

“We have carefully considered the arguments of the parties and find no error in the Court of Chancery’s determination that acquiescence barred Lehman’s claims, given the undisputed facts of record,” the Supreme Court of Delaware said.

Spanish Broadcasting said dismissal of Lehman’s claim does not affect a separately pending lawsuit, which alleges that Lehman wrongfully breached its obligations by failing to fund its portion of Spanish Broadcasting’s former revolving credit facility.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.