Boston, MA 10/21/2013 (wallstreetpr) – A judge has thrown out the lawsuit that was being brought by Sirius XM Radio Inc (NASDAQ:SIRI) investors claiming that directors on the company board acted inappropriately when they allowed John Malone and his Liberty Media Corp to take over the satellite radio company in 2009 without a shareholder vote or a premium being paid.
Judge Leo Strine of the Delaware Chancery Court ruled that the investors had waited too long to file the charges and he said when handing down his findings that the shareholders were unfair for wanting to “sit on the sidelines benefitting from the investment Liberty Media made in Sirius until after the statute of limitations expires and then belatedly seek to deprive Liberty Media of the benefits of the contract it received in exchange.”
The lawsuit contended that in exchange for a $530 million loan to keep the company from going bankrupt at the time, the board agreed to a deal that would allow Malone to ultimately takeover Sirius XM. The loan agreement stipulated that Malone would wait three years before attempting to gain control in Sirius and for their part, the board would not put any barriers in place to prevent the move when it did happen.
In January of this year Liberty Media bought 50 million shares of Sirius and gained majority controlling stock in Sirius. The judge said that the investors should have acted immediately to contest the deal and the directors acted in accordance with the loan agreement when they did not implement defensive strategies to prevent the buyout.
Sirius shareholders led by the City of Miami Police Relief and Pension Fund had attempted last year to have the court issue an injunction against the acquisition but the move was unsuccessful. Liberty Media is now planning to spin off its stake in the company but further details have not been forthcoming.
