Sour Grapes MySpace Suit Dismissed
What people by and large were calling a “sour grapes” lawsuit by self-proclaimed MySpace founder and Intermix board member Brad Greenspan against News Corp., was fully dismissed by a Superior Court judge on Monday.
Greenspan levied some pretty serious accusations at News Corp. and Intermix (MySpace’s parent company) CEO Richard Rosenblatt, calling the News Corp.’s $580 million acquisition of MySpace.com “one of the largest mergers and acquisitions scandals in US history.
The lawsuit, filed in February on behalf of Intermix shareholders, alleges that Rosenblatt conspired with News Corp. to undervalue MySpace, hid the profitability of the site, received kickbacks and indemnity from News Corp., all while News Corp. was blocking competing bids from companies like Viacom.
All of this, said Greenspan, amounted to a “high jacking” of MySpace by News Corp., cheating investors out of $20 billion. Greenspan is also calling for three separate US regulatory agencies to investigate the acquisition.
Superior Court Judge Carolyn B. Kuhl disagreed, dismissing the case and saying that News Corp.’s acquisition was legal and that shareholders made an informed majority vote on it.
New Corp. released a statement reflective of the company’s indignant tone from the outset.
“News Corporation and Fox Interactive Media feel vindicated by Judge Kuhl’s ruling and have always believed that this is merely a situation of unchecked envy leading to a loss of common sense,” said Mike Angus, general counsel of News Corporation’s Fox Interactive Media.”
Richard Rosenblatt was not as diplomatic:
“I have exercised great restraint in not responding to Mr. Greenspan’s baseless and defamatory claims about the propriety of the News Corp. acquisition and my role in the transaction, with the expectation of being vindicated by a court of law,” said Rosenblatt.
“Lost in all the rhetoric is that we delivered to the shareholders, including Mr. Greenspan, a nearly 700 percent increase in stock price.”