TMT tycoon John Malone and several former colleagues on the Charter Communications board of directors have agreed to pay $87.5 million to settle a 6-year-old investor lawsuit tied to the $78.7 billion purchase of Time Warner Cable by Charter in 2015.
Investor Matthew Sciabacucchi sued Malone, along with Gregory Maffei and former Charter CEO and Chairman Tom Rutledge, among several others, claiming they “received unfair tax benefits” through a “side deal” carved out amid the merger.
At the time of the TWC purchase, Malone’s Liberty Media was Charter’s largest shareholder, controlling 26% of stock. The suit said Malone and the rest of the defendants received an all-stock consideration in shares Liberty held in TWC, while other investors received a mix of stock and cash.
The suit was filed back in February 2017 in Delaware. (You can read it here.)
Bloomberg was the first to report on the settlement.
For their part, the defendants don't admit wrongdoing and claim they settled the complaint to “avoid the burden, expense, disruption, and distraction of further litigation.”
The settlement money will actually go to Charter, which the suit alleges was unfairly compensated. ■
