Delaware Supreme Court Affirms Spanish Broadcasting System Summary Judgment Against Lehman Brothers
December 18 2014 - 4:18PM
Spanish Broadcasting System, Inc. (the "Company" or "SBS")
(Nasdaq:SBSA) today announced the dismissal of Lehman Brother
Holdings, Inc.'s ("Lehman") lawsuit, which alleged that SBS had
violated the Preferred Stock Certificate of Designations by
incurring debt without paying quarterly dividends.
"We are pleased with the Court's decision and believe that the
ruling supports our long-standing position that Lehman's claims
were frivolous and without merit," commented Raúl Alarcón, Chairman
and CEO. "We are glad to see this matter resolved and are moving
forward on executing our growth strategy."
On February 14, 2013, Lehman initiated a litigation against the
Company in Delaware Court of Chancery. The lawsuit sought a
declaratory judgment that a Voting Rights Triggering Event had
occurred pursuant to the certificate of designations for the Series
B preferred stock, as a result of the non-payment of dividends.
Specifically, Lehman alleged that the Company was prohibited from
incurring indebtedness, but nonetheless did so for the purposes of
purchasing assets relating to its Houston television station and
the issuance of its 12.5% Senior Secured Notes due 2017.
On February 25, 2014, Vice Chancellor Glasscock granted SBS's
motions for summary judgment and judgment on the pleadings, and
denied Lehman's motion for summary judgment. Lehman appealed.
On December 11, 2014, the Supreme Court of Delaware affirmed the
Chancery Court's dismissal of Lehman's claims stating: "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 dismissal of Lehman's claim does not affect SBS's separately
pending lawsuit which alleges that Lehman wrongfully breached its
obligations by failing to fund its portion of the Company's former
revolving credit facility. SBS will continue to vigorously pursue
this claim.
About Spanish Broadcasting System, Inc.
Spanish Broadcasting System, Inc. is the largest publicly traded
Hispanic-controlled media and entertainment company in the United
States. SBS owns and/or operates 20 radio stations located in the
top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago,
San Francisco and Puerto Rico, airing the Spanish Tropical,
Regional Mexican, Spanish Adult Contemporary, Top 40 and Latin
Rhythmic format genres. The Company also owns and operates MegaTV,
a television operation with over-the-air, cable and satellite
distribution and affiliates throughout the U.S. and Puerto Rico.
SBS also produces live concerts and events and owns 21 bilingual
websites, including www.LaMusica.com, a bilingual Spanish-English
online site providing content related to Latin music,
entertainment, news and culture. The Company's corporate Web site
can be accessed at www.spanishbroadcasting.com.
This press release contains certain forward-looking statements.
These forward-looking statements, which are included in accordance
with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, may involve known and unknown risks,
uncertainties and other factors that may cause the Company's actual
results and performance in future periods to be materially
different from any future results or performance suggested by the
forward-looking statements in this press release. Although the
Company believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no
assurance that actual results will not differ materially from these
expectations. Forward-looking statements, which are based upon
certain assumptions and describe future plans, strategies and
expectations of the Company, are generally identifiable by use of
the words "may," "will," "expect," "believe," "anticipate,"
"intend," "could," "estimate," "might," or "continue" or the
negative or other variations thereof or comparable terminology.
Factors that could cause actual results, events and developments to
differ are included from time to time in the Company's public
reports filed with the Securities and Exchange Commission. All
forward-looking statements made herein are qualified by these
cautionary statements and there can be no assurance that the actual
results, events or developments referenced herein will occur or be
realized. The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results.
CONTACT: Analysts and Investors
Jose I. Molina
Vice President of Finance
(305) 441-6901
Analysts, Investors or Media
Brad Edwards
Brainerd Communicators, Inc.
(212) 986-6667
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