A Delaware judge ruled Friday in favor of IAC Chief Executive Barry Diller in a dispute with Liberty Media Corp. that could help to determine the fate of the company.
A judge decided Liberty had failed to prove Diller violated an agreement between them by pursuing a plan to break the IAC/InteractiveCorp Internet conglomerate into five parts. Vice Chancellor Stephen Lamb of the Delaware Chauncery Court ruled that Diller isn't required to get Liberty's approval for splitting up the company.
New York-based IAC owns such brands as Ask.com, Match.com, Evite and Citysearch.
Diller announced plans in November to spin off its HSN home shopping network, Ticketmaster, LendingTree.com and Interval time-share businesses.
Liberty Media owns about 30 percent of IAC's equity but controls about 62 percent of the voting power because of a dual-share structure. Diller has controlled Liberty's votes for years, under an agreement between the two. Liberty sued to reclaim those voting rights, since it claims that Diller gave them up when he went against Liberty's will in pushing the breakup.
Lamb said in his opinion that Liberty did not have the right to prevent the spin-offs just because they called for a single-tier voting structure. However, he said it was too early to decide whether IAC directors met their fiduciary duties since they had not yet fully approved the plan or its details. Lamb wrote that he would reserve judgment on that until a later date, if needed.
Earlier this month, Liberty lawyer Kevin Abrams suggested that Diller was trying to rid himself of Liberty's influence and strengthen his control of IAC.
Liberty attorneys accuse Diller of threatening a single-tier voting structure in the spinoffs to force Liberty to swap its IAC shares for certain assets, which could include one of the spin-off companies. In that case, Diller could convert his single-vote shares into Liberty's more powerful shares, leaving him with a majority interest.
Diller, who is legendary for rising from the mail room of a top Hollywood talent agency, said at the time that he had enjoyed being on the stand.
"I wish this hadn't happened, but it did," Diller said through a spokeswoman on Friday. "Now it's over and we can all get on with our work and lives."
IAC shares rose $1.71 to $22.20 in after-hours trading. The shares had fallen 27 cents to $20.49 in regular trading on Friday. Liberty Media shares fell to $22.65 after rising 35 cents to $22.90 in regular trading.
