The Wall Street Journal-20080202-The Buzz- IAC- Liberty Move Toward Trial

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The Buzz: IAC, Liberty Move Toward Trial

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A legal dispute between IAC/InterActiveCorp and Liberty Media Corp., its majority voting shareholder, is expected to go to trial in Delaware Chancery Court next month after a judge Friday refrained from issuing an immediate decision on the case.

The judge, Stephen Lamb, approved an order that keeps IAC's current board in place but requires IAC to notify Liberty if it does anything outside the normal course of business. Liberty had asked the court to limit actions that IAC could take pending a trial, which will deal with the question of who controls the $7 billion e-commerce conglomerate. IAC had asked the judge to dismiss the motion outright.

Liberty Media owns a 62% voting stake in IAC, but a longstanding agreement allows IAC Chairman Barry Diller to vote the shares. Liberty sued for control of IAC last week to stop Mr. Diller from proceeding with a plan to spin off four new companies on terms that would reduce Liberty's voting stake in the new entities. Liberty is also moving to replace Mr. Diller and other members of the board.

The trial, likely to be scheduled for the first half of March, will determine whether Liberty can overhaul the board as well as whether IAC can proceed with the spinoff under the terms IAC has proposed.

IAC General Counsel Greg Blatt said in a statement: "As today's developments confirm, our board remains in place, as it logically should, and we will now proceed in litigating the merits of the core issue."

"We are encouraged by the outcome of today's hearing," Liberty Chief Executive Greg Maffei said in a statement.

IAC and Dow Jones & Co., publisher of The Wall Street Journal, are building a personal-finance Web site together. Dow Jones is a unit of News Corp.