Attorneys working with ClassAction.org are investigating whether Starz shareholders were unfairly affected by the recently announced merger between Starz and Lionsgate.
Shareholders of Starz stock may be able to take legal action in light of the recently announced merger with Lions Gate Entertainment. A lawsuit has been filed in Delaware alleging breach of fiduciary duty on the part of the Starz Board of Directors. According to the lawsuit, this deal was orchestrated solely for the benefit of the Board. The suit on file specifically alleges that John Malone, who has an interest in both Lions Gate and Starz, breached his fiduciary duty to shareholders by brokering a deal that was lucrative for him, but that did not take the best interests of the stockholders into account.
Among the allegations are:
The cable channel was poised to become a major player, and the merger preys on a currently low stock value that would have soon begun to climb.
Shareholders, who currently have voting rights, will be stripped of those rights if the merger goes through.
What Does It Mean that the Starz Board May Have Breached its Fiduciary Duty?
Fiduciary duty is the highest and strictest legal duty a person or company can owe another. In this case, the Board has to make sure that any action they take puts the interests of the shareholders ahead of their own, even if those actions (or inactions) are detrimental to their own fortunes.