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Emmis wins latest battle in unpaid-dividend case

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Emmis Communications Corp. has prevailed in a court battle with a group of preferred shareholders who sought $34 million in unpaid dividends.

Federal Judge Sarah Evans Barker on Feb. 28 denied a motion for partial summary judgment in a lawsuit brought in 2012 by Corre Opportunities Fund LP and other preferred shareholders.

Emmis disclosed the ruling Tuesday.

In September 2012, shareholders of the Indianapolis-based radio broadcasting and publishing firm voted to approve a plan by management that eliminated its obligations to pay preferred stock dividends that had accumulated since October 2008.

Emmis sought the measure as part of a plan to stabilize its financial condition and reduce its debt.

Corre and other preferred shareholders alleged the company failed to comply with a number of state and federal laws.

Barker’s 44-page opinion broadly found that the dissident shareholders failed to make a convincing case on a number of grounds, including the so-called fraud-on-the-market doctrine.

Emmis’ president and CEO, Jeff Smulyan, said in a statement, “We were confident in our position, and the federal court has confirmed it."

Shares of Emmis were up 3 percent in late-morning trading, to $3.28. 

It wasn’t immediately clear whether Corre would appeal the decision.

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