Malone, GCI Liberty Board Get Nod for $110 Million Settlement

“Cable cowboy” John Malone, other former members of GCI Liberty Inc.'s board, and a group of investors secured the approval of a Delaware judge for a $110 million settlement resolving a challenge to the telecom holding company’s merger with an affiliate, Liberty Broadband Corp.

Vice Chancellor Sam Glasscock III signed off Wednesday on the deal, ending litigation in Delaware’s Chancery Court over the combination between the two Malone affiliates, each of which holds a large stake in operating subsidiary Charter Communications Inc.

The agreement calls for the payment to be made either by the post-merger entity or the board members’ insurers, according to court filings. Glasscock also awarded $22 million in legal fees to the trio of pension funds leading the case.

The lawsuit, filed last year, accused Malone and Gregory Maffei, a top executive at both companies, of leveraging their “super-voting” shares to merge them in an all-stock deal at a time when the exchange ratio was tilted in their favor by market volatility stemming from the Covid-19 pandemic.

The agreement ending the case “shall in no event be construed as” an admission of wrongdoing by the board members or “a confession by plaintiffs of any infirmity” in their claims, according to the settlement notice filed in June.

The pension funds are represented by Bernstein Litowitz Berger & Grossmann LLP; Prickett, Jones & Elliott PA; Kessler Topaz Meltzer & Check LLP; Klausner Kaufman Jensen & Levinson PA; and Barr Law Group.

Malone and Maffei are represented by Skadden, Arps, Slate, Meagher & Flom LLP and Baker Botts LLP. Other former GBI board members are represented by Morris, Nichols, Arsht & Tunnell LLP and Troutman Pepper Hamilton Sanders LLP.

The case is Hollywood Firefighters’ Pension Fund v. Malone, Del. Ch., No. 2020-0880, 10/6/21.