Investor Sues iHeartMedia Over Shift Of Revenue From Clear Channel Outdoor To Parent Company
May 27, 2016 at 4:07 AM (PT)
BLOOMBERG reports that investor MARIO GABELLI's GAMCO ASSET MANAGEMENT INC. is suing iHEARTMEDIA INC., complaining that the company's Board is violating its fiduciary duty to its shareholders by siphoning off revenue from CLEAR CHANNEL OUTDOOR HOLDINGS to pay iHEARTMEDIA INC.'s debts. The suit, filed in DELAWARE Chancery Court THURSDAY (5/26), alleges that an agreement to send daily CLEAR CHANNEL OUTDOOR HOLDINGS revenue to iHEARTMEDIA leaves the former with a "virtually uncollectible" $640 million receivable.
iHEARTMEDIA's WENDY GOLDBERG told BLOOMBERG that the company considers the suit without merit and that the Board's establishment of a committee of independent directors in 2013 was specifically intended to monitor the relationship between the parent and subsidiary companies. BLOOMBERG notes that GAMCO sided with iHEART in the latter's suit in TEXAS to prevent other investors from declaring the company in default over the transfer of assets to the BROADER MEDIA subsidiary.