IAC-Liberty trial ends
Diller wraps his second day of testimony
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Delaware Chancery Court Judge Stephen Lamb sounded the gavel shortly after Diller left the stand, capping the weeklong trial.
For Diller, the day brought few revelations but many frustrations as he was asked to rehash events spanning the past 12 years.
The two-hour session was less intense than Thursday's appearance, when he weighed his relationship with Malone and marshaled a defense of his leadership of IAC, but had a chippier tone. Kevin Abrams, a lawyer for Liberty, resumed his cross-examination and returned often to topics Diller had addressed several times on Thursday.
"This is silliness," Diller muttered when Abrams posed a hypothetical scenario in which Diller held a company's lone share of stock. "I'm not going to do this unless I'm instructed to." When Abrams pressed
on, Diller said, "I don't understand your questions. If you would ask me in English, I would be happy to answer."
Lamb broke in a couple of times to chide Abrams, at one point cautioning him against "tricking the witness."
Diller and Malone sued each other in January over Diller's proposal to break IAC up into five smaller entities, each a separate public company. Malone says the move will cut his voting control in half, to about 30% from its current 62%.
Under a proxy deal dating to the start of the pair's business relationship in 1995, Malone has agreed to let Diller vote the Liberty shares and effectively control the company.
"That deal is written down on paper," Diller noted Friday. "It has evolved over the years, but it is in writing and anyone can look it up."
Abrams asked Diller if the breakup, which would convert a dual-class stock structure to a single class of shares (thereby reducing Malone's voting rights, though not his stake), meant Diller was "terminating" Malone's input on IAC.
"I'm not terminating anything," Diller said, his voice rising a bit. "He has the same rights he always has."
Lamb, who heard the case without a jury, is expected to issue a ruling March 28 on the matter of whether Diller's breakup proposal constituted a breach of the proxy deal. Lawyers for both sides are presenting briefs on that issue next week.
Even if Lamb sides with Diller, a second question will be debated: whether Diller and the IAC board violated their duty to shareholders with the breakup plan.
