Gilman Law LLP announces that a lawsuit has been filed in the Delaware Court of Chancery challenging the transactions whereby Charter Communications, Inc. (“Charter”) (CHTR) and its alleged controlling shareholder, Liberty Broadband Corporation (“Liberty”) will merge with Time Warner Cable, Inc. (“TWC”) and Bright House Networks, LLC (“Bright House”) to form a new entity, CHC I, LLC (“New Charter”).
The complaint asserts breach of fiduciary claims against the Board of Directors of Charter and Liberty, which owns approximately 26% of Charter’s outstanding stock. According to the complaint, in connection with the proposed acquisition of TWC, Charter will allow Liberty to acquire $4.3 billion of newly issued shares at a price equivalent to $176.95 per Charter share, and in connection with the proposed acquisition of Bright House, Charter will allow Liberty to acquire $700 million in newly issued shares equivalent to $173 per Charter share.
Liberty will also receive for no consideration from Liberty an irrevocable five-year voting proxy for 6% of the outstanding voting power of Charter, which would bring Liberty’s total voting power post transactions to 25%. Thus, the complaint alleges that Liberty will be the only shareholder who can avoid significant dilution as a result of consummation of the transactions.
The complaint alleges that Liberty and Charter’s directors breached their fiduciary duties to Charter shareholders by approving the unfair terms of the transactions. Specifically, the complaint alleges that the share issuances are unfairly priced because, among other reasons, Charter’s financial advisors project that the combined company could be worth significantly more per share post-closing, and that the terms of the transactions unfairly favor Liberty. The complaint also asserts that Definitive Proxy statement issued in connection with the proposed transactions is materially incomplete.
If you are a shareholder of Charter Communications, Inc. common stock and have concerns about these transactions then please contact Gilman Law LLP today, at 1-888-252-0048 or www.investment-losses.com, to ensure your legal rights are protected.
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Gilman Law LLP, a leading financial law firm, has been recognized for delivering successful results to their clients across a broad range of claims stemming from securities class actions and derivative actions. For over 35 years, the Gilman Law LLP team of highly experienced lawyers has earned renown for tireless work on behalf of their clients on many of today’s most challenging and important legal issues.
Contact: Kenneth G. Gilman