Diller’s In A Pickle

If Barry Diller didn’t know already, he certainly knows now – breakups are a bitch.

What started last November as the IAC CEO’s plan to spin off the company’s Ticketmaster, HSN home shopping network, Interval time-share business and LendingTree mortgage referral units has taken a turn for the worse, with future control of the company resting on the outcomes of some recent legal filings.

Diller originally faced some "mild disagreement" over the proposal from Liberty Media, which owns 30 percent of IAC and a 62 percent voting interest in the company, but the conflict escalated to the litigious level when IAC filed suit in Delaware Chauncery Court January 22nd.

The complaint asked for a court declaration that the proposed spin-off plan and voting structure did indeed meet the guidelines of IAC’s bylaws.

"IAC and Mr. Diller filed an action in Delaware court to seek affirmation of its view of their rights," the company said in a statement. "It did this so that a court could promptly resolve the dispute before either IAC, its shareholders, or Liberty could be injured by anyone taking definitive actions based on conflicting interpretations of the governing documents."

However, Liberty Media was quick to file a countersuit, alleging Diller has tried to mount a "corporate coup" to limit Liberty’s power as a majority stockholder.

"If consummated, the spin-off will free him from the watchful eye of a controlling stockholder, permit him to liquidate a large portion of his interest in IAC without losing control over the company’s marquee assets, and preserve his legacy," the suit said.

Liberty claims that IAC’s stagnating stock prices are merely evidence that Diller, along with some other current board members, has violated his duties to shareholders and should be removed from the board.

And at the forefront of that removal effort is Liberty CEO Gregory Maffei.

During his two-year tenure, Maffei has balked at Diller being allowed to vote on behalf of Liberty Media through a longstanding agreement between the companies, the Wall Street Journal reported, and has taken steps to change that relationship.

Maffei recently told the WSJ that his duty as CEO is merely "protecting Liberty’s interests and to get full value for its assets."

IAC countered that "Liberty has now gone off the deep end."

"This action is a desperate sideshow designed to exert pressure on the Board and management of IAC as they attempt to responsibly act in the best interest of their stockholders," the company said. "All it demonstrates is that Liberty will stop at nothing to advance their own interests at the expense of the other stockholders."