Liberty Media Corp. Chairman John Malone took the witness stand in a Delaware court Monday morning, testifying that he believes a proposed restructuring of IAC/InterActiveCorp breaches a more than decade-long agreement between himself and IAC Chairman Barry Diller, the Wall Street Journal reports.
Mr. Malone also testified that any restructuring of IAC must proceed in a way that preserved the dual-class voting structure through which Liberty exercises its majority control.
"It's a breach of the stewardship that we granted him when we started this whole relationship,'' said Mr. Malone. "It's a breach of faith."
Mr. Malone was the first witness to take the stand as a legal battle between the Liberty Chairman and Mr. Diller went to trial, in what is expected to be a five day hearing. The battle is over control of IAC, a $5 billion company built by Mr. Diller with Mr. Malone's backing.
At issue is whether Mr. Diller has the right to spin off companies from IAC on terms that would halve Mr. Malone's Liberty Media Corp. voting power over those businesses. Liberty owns a majority voting stake in IAC, but under a longstanding proxy agreement Mr. Diller is allowed to vote the shares. Liberty has asked the court for the right to strip Mr. Diller of his control by terminating his proxy and booting him from IAC's board.
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