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.