A proposed Class Action lawsuit against Liberty Media by investors in pay-radio operator Sirius-XM cannot proceed, ruled a Delaware court. The action was based on complaints that Liberty Media Corp failed to offer a premium to investors or hold a shareholder vote when it acquired Sirius-XM in 2009.
Delaware Chancery Court Judge Leo Strine ruled that investors had “waited on the sidelines” until the statute of limitations had run out, and had since benefitted from Liberty’s acquisition and could not now belatedly seek to deprive Liberty of the benefits it received in exchange. Sirius-XM was near-bankrupt when Liberty loaned the broadcaster $500 million in return for a 40 per cent stake in the business.
Liberty has since gained insofar as Sirius-XM’s share price at the point of purchase was just 16 cents/share, and is now valued at almost $4.
Judge Strine said that Sirius’ shareholders should have immediately challenges the Board’s decision to agree to Liberty’s loan terms.