Two Australian media moguls have lost a court challenge to CBS’s planned buyout of bankrupt television broadcaster Ten Network Holdings, giving the US media giant a strong upper hand ahead of a creditor vote on Tuesday.
CBS, Ten’s biggest creditor, swooped on the TV station after it went into administration three months ago, upending acquisition plans by Twenty-First Century Fox Executive Chairman Lachlan Murdoch and business partner Bruce Gordon that had been on hold as they awaited reforms to media ownership laws.
The two magnates put in a sweetened offer to counter CBS’ AU$201.1 million (US$160 million) bid on Friday, September 15, after the Australian Senate voted to relax ownership rules.
But they appear to be very much on the back foot after an Australian judge on the following Monday rejected arguments that Ten’s administrator, KordaMentha, had mishandled the sale to CBS by not providing sufficient information to creditors about why the CBS deal had been preferred.
Justice Ashley Black also said in his ruling for the New South Wales Supreme Court that the US firm should not be blocked from voting at the creditor meeting as to do so would discourage creditors from rescuing viable firms.
“For these reasons [the case] should be dismissed,” he said.
On Monday, September 18, Bruce Gordon announced he would appeal the decision ahead of a vote at a scheduled creditors’ meeting on Tuesday, September 19. If the Court of Appeal were to rule in favor of Murdoch and Gordon, the ruling would rescind said vote.
Full Content: The Sidney Morning Herald
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