Bank Accuses Murdoch Of Nepotism
New York-based Amalgamated Bank and Illinois-based Central Laborers Pension Fund have filed lawsuits in Delaware Chancery Court charging that Rupert Murdoch's News Corp's planned $675-million acquisition of Elisabeth Murdoch's Shine television company violates, in the words of the Amalgamated suit, "the entire fairness standard both on the basis of price and process." Amalgamated is the trustee for several firms holding millions of dollars in News Corp stock. "The transaction makes little or no business sense for News Corp and is far above a price any independent, disinterested third party would pay for Shine," the filing said. The two lawsuits do not seek to block the purchase but seek unspecified damages that the stockholders maintain they incurred as a result of what they say is an act of "nepotism." Amalgamated accused Murdoch of operating News Corp as "a family-owned candy store," installing a board that is "wholly lacking in independence since they are Murdoch family members or longtime friends, News Corp executives, or persons who have business relationships with Murdoch." The Shine transaction includes a provision that would add daughter Elisabeth to the News Corp board. "This is going to be a very interesting case. It will be a wonderful case for professors to teach to their corporate law classes," UCLA law professor Lynn A. Stout told today's (Friday) Los Angeles Times . "What the plaintiffs are alleging is that Rupert Murdoch is using his firm to funnel money to his daughter."