Emmis pitching in on breach-of-contract lawsuit

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Emmis Communications Corp. will contribute $200,000 toward legal fees in a lawsuit that company founder Jeff Smulyan’s JS Acquisition LLC filed over its failed effort to take the Indianapolis-based media company private.

Emmis’ board unanimously approved the expenditure Dec. 24, according to a filing this week with the Securities and Exchange Commission. If the litigation is successful, the company will be repaid $300,000 from any financial recovery.

Indianapolis law firm Bose McKinney & Evans LLC was retained to coordinate the breach of contract lawsuit, filed in September against three Alden Global Capital units that backed out of the going-private deal.

JS Acquisition says the transaction failed when Alden changed course after months of negotiations with a group of preferred shareholders, costing the company about $10.2 million in fees and other expenses.

Alden and JS Acquisition, a private company formed by Smulyan to complete the buyout, agreed in April to take Emmis private. But, in July, nine dissident investors—holding a combined 38 percent of the company’s preferred shares—emerged to block the $90 million deal.

Although the parties worked to find a compromise, Alden ultimately pulled out of the transaction, citing a “precipitous” drop in radio-industry assets.

Since the deal was announced April 26, Emmis shares have declined in value by about 70 percent, closing Tuesday at 69 cents. The company is in danger of being delisted from the NASDAQ stock exchange because its share price has lagged below $1 for so long.

Founded by Smulyan in 1981, Emmis owns 23 radio stations in the United States and publishes regional magazines in seven cities, including Indianapolis Monthly. It also operates radio stations in Slovakia and Bulgaria.


  • Charlie Morgan
    Take a look at Charlie Morgan, the head of Indy Radio. He pretty much cleaned house and replaced some really good talent with his cronies from previous employers. Emmis needs a management overhaul with realistic salaries and management that benefits the company.
  • Your kidding me, Right!
    Jeff Smulyan is looking out for one thing and only one thing, Jeff! In 2009 he took a first time ever signing bonus of $200,000 for a new three year contract when at the same time, employees lost jobs, took pay cuts, and lost certain parts of their health care. It's time for a change in management, that's what the board should be focusing on, but when you got a board getting paid what they get paid, that won't happen.
  • Emmis chiping in? Come on we must be really stupid
    What does emmis shareholders gain from the lawsuit? 100,000 profit from the "loan"
    Again, the left hand feeding the right and the shareholders remain hungry!
  • Well, I doubt that.
    There is nothing that I would like better than to see a strong company (media or otherwise) anchoring the WSW portion of Monument Circle. But Emmis appears to be a loser. If we're lucky, maybe ExactTarget will take over that building after Emmis disappears.

    No accusations. But if you use your public company to make your childhood dream of owning a professional baseball team come true, well...
  • More integrity in his little finger than most have in their whole body.
    It sounds like you don't know anything about Mr. Smulyan's lifestyle. He is a humble man who has earned enough to afford him some nice things. If you were to talk to him personally you would know that aside from his family the only thing that really matters to him is Emmis. He would sacrifice his personal comfort if it would help Emmis. He built that company and is only trying to regain control so he can rebuild it into the company he knows it can and should be.

    You also don't seem to know what a ponzi scheme is, which is odd considering all of the press in the last year or so around the biggest ponzi scheme in history. You said it your self, "assets deteriorated" that would imply market forces creating the losses. How does this at all look like cash from investors being used to falsely pay out return to prior investors instead of being invested. If you are bitter about losing your hat in the market you should pay more attention to your investments.
    • Where is IBJ's prosecutorial zeal?
      Local media 'mogul' Smulyan has been running a Ponzi scheme of sorts, using the assest of Emmis to finance an ongoing luxe lifestyle while the assets have deteriorated almost to nothing. The 'board' of Emmis appears to have failed miserably in it's fiduciary responsibility to the shareholders...yet the IBJ can 'see no evil'
      where Smulyan is involved..unlike it's continued hounding of Tim Durham...

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