Emmis, Dissident Preferred Shareholders Reach Settlement Agreement
December 7, 2015 at 4:01 AM (PT)
EMMIS COMMUNICATIONS CORP. has settled its dispute with dissident preferred shareholders, ending the long-running legal battle over the company's move to convert the preferred shares to common stock, allowing the company to avoid having to pay $26.7 million in accrued and unpaid dividends that had been suspended from 2008 through 2012.
The company had most recently seen its victory in District Court affirmed by the U.S. Court of Appeals for the Seventh Circuit.
In the settlement and release agreement with CORRE OPPORTUNITIES FUND, LP, ZAZOVE ASSOCIATES LLC, DJD GROUP LLLP, FIRST DERIVATIVE TRADERS LP and KEVAN A. FIGHT, EMMIS is dropping its bill of costs to recover expenses, and is agreeing to change the voluntary conversion ratio for Preferred Stock to convert each share to 2.80 shares of Class A Common Stock automatically on the fifth business day after the Preferred Stock is delisted by NASDAQ, and both parties are releasing each other from the lawsuit claims.
The SEC filing for the settlement notes the company's deficiency notice and delisting warning and says that EMMIS "does not anticipate that such failure will be timely cured and the Preferred Stock will subsequently be delisted by NASDAQ."