By: Shareholders have dropped a federal lawsuit against eight Tribune Co. directors that accused them of taking steps to ward off a takeover, including a stock repurchase plan they described as a "suicide pill."
U.S. District Judge Milton Shadur said Thursday that the plaintiffs dropped their suit Wednesday after he questioned whether it should be in federal court.
He had scheduled a hearing for Thursday to discuss the jurisdiction issue.
Shareholders filed the suit in U.S. District Court in Chicago on Sept. 19 and sought class-action status.
The suit alleged that Tribune Chairman Dennis FitzSimons and seven other directors had "erected draconian defensive barriers that prevent any potential acquirer from, among other things, attempting to buy the company directly from shareholders."
The suit took issue with the company's stock repurchase plan, which it said "was designed to and has had the effect of creating a defensive barrier ... akin to a 'suicide pill,' that significantly decreases the likelihood that any potential acquirer will make an offer for the company."
In an order issued Sept. 25, Shadur questioned whether he had jurisdiction over the matter, suggesting that the case should be filed in state court.
When the suit was filed earlier this month, Gary Weitman, Tribune's vice president of corporate communications, told The Associated Press that the company believed "the lawsuit has no merit."
The Tribune did not file a response to the suit.
In Connecticut, Tribune owns the Courant, Greenwich Time and The Advocate of Stamford newspapers, along with television stations WTIC and WTXX. The Courant has cut its newsroom staff to 275 employees, down 70 positions since July 2003.
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