DIRECTV 2006 Annual Report Download - page 43

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THE DIRECTV GROUP, INC.
judgment against us will ultimately be reversed, or remanded for a new trial in which we believe we
would prevail.
***
Darlene Litigation. On January 30, 2007, we acquired Darlene’s 14% equity interest in DLA LLC
for $325.0 million. All pending litigation summarized below related to Darlene against us and the other
parties described below has been dismissed.
On October 18, 2004, Darlene filed suit in the circuit court for Miami-Dade County, Florida,
against DIRECTV Group and certain of our subsidiaries, News Corporation, and others, which we
refer to collectively as the Defendants. The suit alleged fraud and violation of fiduciary, contractual and
other duties owed to Darlene and to DLA LLC by one or more of the Defendants. Darlene sought
injunctive relief to preclude DLA LLC from consummating the Sky Transactions, $1 billion in damages
and other relief. On November 3, 2005, the state court judge dismissed certain charges, including fraud
claims, for improper venue and entered an order essentially staying the balance of the proceedings,
including those related to fiduciary and other duties and those brought against News Corporation,
pending the arbitration between Darlene, DIRECTV and DLA LLC. In June 2005, we filed suit
against Darlene in the United States District Court for the Southern District of New York seeking
specific performance and declaratory relief with respect to the release agreement and covenant not to
sue executed by Darlene in February 2004 in connection with the DLA LLC reorganization and related
transactions. On September 27, 2006, the District Court granted our motion for summary judgment and
found Darlene liable for breach of contract.
***
Other. We are subject to other legal proceedings and claims that arise in the ordinary course of
our business. The amount of ultimate liability with respect to such actions is not expected to materially
affect our financial position, results of operations or liquidity.
(b) No previous reported legal proceedings were terminated during the fourth quarter ended
December 31, 2006.
***
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
***
32