Vivendi Sues Diller Co.3/17/2004 7:47 AM Eastern
Vivendi Universal said Wednesday that it has filed suit against USANi Sub LLC, a unit of Barry Diller’s InterActiveCorp, Reuters reported.
The French media giant said Diller is delaying its plans to merge its Vivendi Universal Entertainment U.S. arm with General Electric Co.’s NBC television unit.
Vivendi said it has satisfied legal obligations to USANi by putting up letters of credit backed by U.S. Treasury securities to cover the preferred VUE shares Diller owns, Reuters said.
However, Diller -- who, through his company, has veto rights over the merger -- rejected the letters of credit and "is attempting to gain leverage" in tax-related litigation with Vivendi that "has nothing to do with" the preferred shares, Vivendi said in its complaint, Reuters reported.
USANi is trying to rewrite the contract by demanding that it be allowed to draw on the letters of credit if VUE's net worth falls below a threshold amount, Vivendi added in its complaint.
Vivendi's complaint was filed in Delaware Chancery Court.