Twenty-First Century Fox 2008 Annual Report Download - page 118

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Notes to the Consolidated Financial Statements (continued)
Greenspan Litigation
On February 10, 2005, Brad Greenspan, Intermix’s former Chairman and Chief Executive Officer who was asked to resign as CEO and was removed
as Chairman in the fall of 2003, filed a derivative complaint in Los Angeles Superior Court against Intermix, various of its former directors and
officers, VantagePoint and certain of VantagePoint’s principals and affiliates. The complaint alleged claims of libel and fraud against Intermix and
various of its then current and former officers and directors, claims of intentional interference with contract and prospective economic advantage,
unfair competition and fraud against VantagePoint and certain of its affiliates and principals and claims alleging that Intermix’s forecasts of
profitability leading up to its January 2004 annual stockholder meeting and associated proxy contest waged by Mr. Greenspan were false and
misleading. These claims generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in
October 2003, Mr. Greenspan’s contemporaneous separation from Intermix and matters arising during the proxy contest. The complaint also
alleged that Intermix’s acquisition of the assets of a company known as Supernation LLC (“Supernation”) in July 2004 involved breaches of
fiduciary duty. Mr. Greenspan sought remittance of compensation received by the various then current and former Intermix director and officer
defendants, unspecified damages, removal of various Intermix directors, disgorgement of unspecified profits, reformation of the Supernation
purchase, punitive damages, fees and costs, injunctive relief and other remedies. Intermix and the other defendants filed motions challenging the
validity of the action and Mr. Greenspan’s ability to pursue it. Mr. Greenspan voluntarily dismissed this action in October 2005.
Prior to dismissing his derivative lawsuit, in August 2005, Mr. Greenspan filed another complaint in Los Angeles Superior Court against the
same defendants. The complaint, for breach of fiduciary duty, included substantially the same allegations made by Mr. Greenspan in the above-
referenced lawsuit. Mr. Greenspan further alleged that defendants’ actions have, with the FIM Transaction, culminated in the loss of
Mr. Greenspan’s interest in Intermix for a cash payment allegedly below its value. On October 31, 2005, the defendants filed motions seeking
dismissal of the lawsuit on the grounds that the complaint failed to state any cause of action. Instead of responding to these motions,
Mr. Greenspan filed an amended complaint on February 21, 2006, in which Mr. Greenspan omitted certain previously named defendants and added
two other former directors as defendants. In this amended complaint, Mr. Greenspan asserted seven causes of action. The first two causes of
action, for intentional interference with prospective economic advantage and violation of California’s Business Professions Code section 17200,
generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in October 2003 and allege that
Mr. Greenspan was “forced” to resign. The third through sixth causes of action asserted various claims for breach of fiduciary duty related to the
FIM Transaction and substantially mirrored the allegations in the Intermix Media Shareholder Litigation. By Order of March 20, 2006, the court
ordered that Mr. Greenspan’s claims based on the FIM Transaction be severed from the rest of his complaint and coordinated with the claims
asserted in the Intermix Media Shareholder Litigation. Mr. Greenspan asserted a seventh cause of action against Intermix for indemnification. In
his amended complaint, Mr. Greenspan sought compensatory and consequential damages, punitive damages, fees and costs, injunctive relief and
other remedies. Motions to dismiss the first six causes of action were filed and, on October 6, 2006, granted without leave to amend. On
November 21, 2006, Mr. Greenspan dismissed with prejudice the seventh cause of action for indemnity, which was the only remaining claim and
his sole cause of action against Intermix. On January 24, 2007, Mr. Greenspan filed a notice of appeal of the court’s October 6, 2006 ruling.
Mr. Greenspan’s opening brief in the Court of Appeal was filed on October 23, 2007. The Intermix Media Shareholder appeal and Greenspan appeal
have been coordinated in the court of appeal. Defendants filed a joint opposing appeal brief in both matters on April 16, 2008. The shareholder
appellant reply brief was filed on July 10, 2008. Greenspan did not file a reply brief. No hearing date has been set yet.
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