Emmis wins latest battle in unpaid-dividend case

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.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.