Liberty Media sued over Deutsche Telekom cable
biz.yahoo.com
DENVER, July 27 (Reuters) - Klesch & Co., a London-based investment firm, on Friday sued Liberty Media (NYSE:LMGa - news) and its chairman John Malone, claiming it was pushed out of a partnership with Liberty to buy six regional cable networks from Germany's Deutsche Telekom .
In June, Liberty said it was buying 100 percent of the six cable companies.
Klesch is alleging fraud, breach of contract and unjust enrichment and wants compensatory and punitive damages, according to the lawsuit filed in U.S. District Court.
Klesch, headed up by Gary Klesch, said in February it entered into a partnership with Liberty to buy a majority interest in the six regional cable companies that Deutsche Telekom was selling.
In June, Liberty said it planned to gain total control of the cable TV operations, taking cable mogul Malone a step closer to building a U.S. style cable business in Europe.
At the time Liberty, which is paying $4.69 billion, said buying the cable entities outright would give it more flexibility.
But in its lawsuit Klesch said Liberty never intended to enter into an equal partnership with it. Klesch was given an option to buy a 25 percent stake in the company.
``So long as defendants believed that they needed Klesch and its experience and expertise, they represented to, and agreed with, Klesch that Liberty Media and Klesch were equal partners,'' the lawsuit said.
The lawsuit also said that Klesch received a letter this week from Liberty, informing it that ``Liberty is not now, and has never been, a partner with you or your company.''
A spokeswoman for Englewood, Colorado-based Liberty was not available to comment on the lawsuit.
The lawsuit said that Deutsche Telekom in 1999 said it would divide the nationwide network into nine regional companies, selling a majority stake in each of the nine. Klesch acquired one of the companies and had exclusive rights to buy two others.
The lawsuit claimed Liberty had originally declined to bid for any of the nine and then lured Klesch to share its cable rights with Liberty. |
