Los Angeles litigation outfit Quinn, Emanuel Urquhart & Sullivan LLP has sued Media News Group Inc., on behalf of Solus Alternative Asset Management, a New York City hedge fund that owns a 24 percent stake in the media company.
Solus claimed in the lawsuit, filed last week in Delaware Chancery Court, that Media News Group majority stakeholder Alden Global Capital LLC recently engineered “a fundamental change in the company’s business” without informing stockholders.
Alden is making investments “that have no relationship to its media business” with “no disclosure or explanation to the minority stockholders,” the lawsuit stated.
Denver-based Media News Group, which does business as Digital First Media, owns the Southern California News Group, which runs 11 daily newspapers, as well as multiple weekly newspapers and magazines. Among SCNG's newspapers are the Long Beach Press-Telegram, Los Angeles Daily News and Orange County Register, which saw significant layoffs earlier this year.
The lawsuit calls on News Media Group to release records that may reveal a breach of fiduciary duty.
The defendant has not filed an answer to the complaint.
Media and entertainment reporter Matthew Blake can be reached at email@example.com or (323)556-8332.
For reprint and licensing requests for this article, CLICK HERE.