Emmis Sues Group Of Preferred Shareholders
March 26, 2012 at 3:54 AM (PT)
EMMIS COMMUNICATIONS CORP. has filed suit against a group of shareholders who are opposing the company's attempt to pass changes to the terms of its Preferred Stock and institute a retention plan to pay certain employees bonuses, asking a MARION COUNTY, INDIANA Circuit Court judge to declare the amendments legal.
The suit against ZAZOVE ASSOCIATES LLC, CORRE OPPORTUNITIES FUND, LP, DJD GROUP, KEVAN A. FIGHT, and FIRST DERIVATIVE TRADERS LP (together, the "Lock-Up Group"), asks the court to rule that EMMIS has the right to change Preferred Stock dividend rights, block Preferred shareholders from voting as a separate class on sales or mergers, and end the Preferred shareholders' right to convert the stock to Class A Common Stock upon a change of control.
In addition, EMMIS is seeking court validation of its retention plan to reissue 400,000 shares of Preferred Stock and vote those shares itself. The dissidents have agreed to vote together under a "Lock-Up Agreement" to battle the changes in Preferred Stock, alleging that the changes that allow the company to vote the reissued Preferred Shares, giving EMMIS a two-thirds majority of the Preferred Stock vote, are illegal.